October 5, 2022

Warnings raised over lease loophole in new debt plans

Underneath present proposals, lease money owed can be thought of ‘discretionary’ as a result of dangers related to delaying lease funds, comparable to the owner not renewing a tenancy settlement.

In response to the session, Propertymark says SDRPs are a constructive step however they need to solely assist legitimately struggling tenants to pay their lease and stop the potential of rogue tenants delaying already prolonged and costly courtroom procedures.

It’s calling for debt advisers to be mandated to solely enable lease money owed to be included within the plans as a final resort, as a landlord might fall into mortgage arrears and be unable to take possession proceedings in respect of arrears included in a reimbursement plan.

Propertymark additionally desires tenants with a historical past of lease arrears to be exempt from being eligible for an SDRP, and for mediation between the tenant, agent, landlord and debt advisor to be a requirement when drawing up a plan so the frequency and quantity of cost are in one of the best pursuits of all events concerned.

Timothy Douglas, Head of Coverage and Campaigns for Propertymark, stated, “Throughout these troublesome instances, it’s important we discover methods to assist tenants who quickly can’t afford to repay money owed together with lease whereas making certain the options can’t be abused by those that don’t have any intention of paying.

“The UK Authorities will want to pay attention to the dangers related to delaying housing debt funds. This might put landlords prone to falling into mortgage arrears, which might put them prone to repossession, doubtlessly inflicting the tenant to grow to be homeless.

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“Our analysis into the present personal rented sector alongside common conferences with letting brokers throughout the UK has hinted that inventory is already at very low ranges and plenty of landlords are leaving the sector. Any additional laws that landlords understand as a threat to their funding will additional scale back the supply of properties to lease.”