First Tier Tribunal Central Housing Group

First Tier Tribunal Reveals Rejecting Risky Tenants

A document released by a London First Tier Tribunal outlining a judge’s recent decision over a contested tenancy deposit looks – at first glance – like any other property squabble.

But for me, it’s much more than that. What it really represents is the first public sign of a growing problem that has been quietly affecting millions of tenants for several years, and a problem that many people have been warning about ever since governments all over the UK began their tax and regulatory crackdown on landlords.

The case was brought by a tenant who along with her grown-up daughters lost her holding deposit on a rented property earlier this year after one of them failed a credit check requested by the landlord. This was after an undisclosed CCJ was discovered.

The landlord declined to enter into a tenancy agreement with them on that basis, and refused to return the holding deposit citing lost marketing time for the property as a result of it having been taken off the market pending the credit checks.

False or misleading

The tenants had applied for the holding deposit to be returned to them under the Tenant Fees Act 2019 which fortunately for the landlord does not apply if the tenant provides false or misleading information to them or their letting agent.

Happy days for the landlord, but what it illustrates is the rising number of people who are being rejected by landlords because of their poor or dubious financial histories.

Landlords are becoming increasingly risk averse as the financial pressures of extra taxation and more costly regulation bear down on them.

Section 21

As LandlordZONE reported earlier this year, this trend is in fully swing as the Government prepares to ban Section 21 evictions; referencing firm Goodlord reported that the share of those insisting that tenants pay two or more months’ rent upfront has risen by 43% since the pandemic.

This, when added to the huge imbalance between supply and demand in the rental market, means tenants with poor financial or behavioural track records are likely to find it impossible, or at the very least increasingly difficult, to secure tenancies unless they can offer guarantors or pay rent in advance. No one in Government can say they didn’t see this problem coming.

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