Social landlord possession claims up 8% as recession takes hold

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Legal, Local Government

Possession claims by social landlords leapt by 8% in the first quarter of the year with rent arrears behind the overwhelmingly majority of cases, according to new research.

Figures obtained by legal information provider Sweet & Maxwell – which says the double-dip recession is now showing in the social housing market – reveals that possession claims rose to 25,207 in the first quarter of this year - up from 23,189 in Q4 2011.

It said successful claims leading to possession orders rose by 5.6% - up from 16,174 to 17,130 over the same period.

The figures end a three-year downward trend in possession claims and are at their highest quarterly levels since the peak of the recession in Q1 2009.

“These figures are a sign that an increasing number of people simply cannot pay their rent as the economy dips again," says Daniel Dovar, barrister at Tanfield Chambers and author of Sweet & Maxwell’s ‘Residential Possession Proceedings’.

"Many of Britain’s social housing tenants are facing a crisis of rent arrears.”

He added: "While some possession orders are the result of antisocial behaviour or illegal subletting, the fact is that most orders are issued because the tenant’s rent arrears have become unsustainable.”

Sweet & Maxwell warned the effects of the Government’s Affordable Rent programme – where landlords can charge rents at up to 80% of the market rent – have not even begun to be felt yet, but that they will “not be positive” for social housing tenants suffering from rent arrears.

In October 2010, capital funding for new social housing was reduced from £8.4 billion to £4.5 billion.

“Demand for social housing has outstripped supply for a long time, and that trend shows no sign of changing," said Dovar. "Reducing the budget for new social housing puts more pressure on the finances of social housing landlords, and that in turn is likely to lead to an increase in the number of possession claims.”

He added that as the economy recovered from the first dip of the recession, the number of social landlord possession claims reduced. "The current unemployment rate is higher than it ever was during the recession’s first dip, so we’re now seeing the number of possession claims climb again," he said.