Private landlords face a hike in eviction costs for a second year in a row under quietly announced new government plans.
A consultation is underway suggesting that fees for county court possession claims should increase by £75 a claim.
The increase is the MoJ’s way of shaving £55 million a year off costs demanded under the government’s Whitehall austerity regime.
For landlords, the cost of filing court papers to possess a buy to let home will go up from £280 to £355, while online costs rise from £250 to £325.
Landlords can ask for a court to order tenants pay the fees in the event of a successful claim.
However, until the claim is resolved in court, the landlord has to carry the cost, and in most cases the tenant cannot afford to pay the debt even if a county court judgment is obtained.
Fees for possession claims were increased last in April 2014 ‘ from £175 to £280 for paper claims and from £100 to £250 for online claims.
The rate of increase far outpaces inflation during the period ‘ which currently stands at 0.5% while the increase reflect rises of nearly 27% for paper claims and 23% for online claims.
The ministry reckons the move will raise an extra £15 million a year for government coffers.
According to the latest government figures, 38,509 possession claims from landlords, housing associations and councils went before the courts in the second quarter of last year.
Mortgage lenders submitted almost 11,000 possession claims.
The further proposals for raising fee income to make good the financial shortfall are simple and straightforward measures to address financial pressures,’ said a ministry spokesman.
In recent years, government policy has been to set fees on the basis of full cost recovery: that is, the use of fee income to recover the full cost of the court system, minus the cost of fee waivers. However, until now, the courts have been operating at less than full cost recovery, which has diverted resources from other areas of operations.
The consultation closes on February 27, 2015 ‘ submissions can be made here
… LandlordZONE.
Article courtesy of LandlordZONE
