A significant number of people seeking properties to rent are finding themselves excluded and forced to live in temporary accommodation, it has been claimed, as landlords be become more risk averse.

Ross McColl (main image) who runs Link Property, a firm specialising in guaranteed rent for landlords but which operates a property portfolio too, says his ‘coalface’ experience reveals that landlords are becoming increasingly worried about giving tenancies to high-risk tenants, prompted by the eviction courts backlog, the looming Renters’ Rights Bill and the ending of Section 21 ‘no fault’ evictions.

McColl also says more smaller landlords with one or two properties are leaving the sector ahead of the Bill and this has been reducing supply, pushing up rents and making homes to rent more difficult for all tenants to find.

“A number of these tenants are doomed to live within council-provided temporary accommodation for prolonged periods because private landlords are either unable or unwilling to give them a chance,” he says, labelling them as a new group the ‘unrentables’.

“If you were to go back ten or fifteen years then landlords were less risk averse about this group of tenants because, if things went wrong, they knew they could repossess the property within a set time frame.

Court delays

“But now that we have huge delays within the courts system, and the looming abolishment of Section 21, that will no longer be true.”

McColl says the situation is a ‘perfect storm’ and will only get worse once the Renters’ Rights Bill goes live.

“What people also forget is that the removal of Section 24 and therefore landlords’ ability to claim mortgage interest rates against their tax bills has, while it’s been a factor in persuading some landlords to quit the sector, more recently become a major problem as interest rates have risen."

Rent guarantees

He also says the situation is being made worse by rent guarantee insurance providers.

“I’ll give you an example – we had a tenant who got behind with their rent and so we had report that to the guarantee provider as per its rules, but in the meantime the tenant caught up with their rent,” he says.

“The company offering the cover said the tenants would have to be re-referenced for the policy to continue and the tenant, because of today’s higher referencing hurdles, failed referencing leaving our landlord with a difficult decision – so they chose to evict the tenant.

“That’s a real-world example of what’s happening at the moment as landlords become more worried that risky tenants are becoming more difficult to evict.”