The number of landlords seeking unpaid rent has nearly tripled since the pandemic began, as even wealthy tenants have begun defaulting on payments.
Instructions for rental debt recovery services are up 180% in the last year, compared to the previous 12 months, according to Landlord Action, an eviction company.
Paul Shamplina of the recovery service said a large portion of the claims had been filed against tenants who had enough money to cover their bills but withheld rent because landlords were unable to remove them during the pandemic eviction ban.
Shamplina quoted a landlord who recently claimed £14,950 in arrears, who had said his dishonest tenant had refused to pay despite having access to £250,000.
“I have always taken into account the personal circumstances of my tenants, but this tenant ran a company that had £250,000 in the bank. They abused government-imposed restrictions that were designed to help those in need,” the landlord said.
“The tenants bought a property, renovated it and managed to pay off the mortgage, all while living in my property for free.”
Tenants stopped paying rent in October 2019 and were able to remain in the property during the closure due to the Covid eviction ban.
Shamplina said another landlord client was trying to recover a £200,000 rental debt.
“What many of our cases have in common is that the tenants had the means to pay. For example, another case is against a practicing doctor who owes £42,000,” said Mr Shamplina.
Between April 2021 and March 2022, homeowners made 400 debt recovery claims through Landlord Action.
The lack of protection against dishonest tenants during the pandemic has scared landlords, who are also wary of incoming Energy Performance Certificate targets, meaning they will have to pay up to £10,000 per property on green upgrades.
As a result, some are being sold and this could be part of the reason why there has also been an increase in landlords evicting tenants who have not defaulted on rent payments.
Between October and December 2021, 5,260 households were threatened with homelessness due to serving a Section 21 “no-fault” eviction notice, an increase of 37% compared to the same period in 2019, according to data. of the government.