Court fee reform: landlords express anger
In April 2014, the Ministry of Justice (MoJ) angered landlords nationwide by increasing its possession claims court fees by 150% on section 8 claims valued between £100 and £250. They also added £105 to the Accelerated Possession fee – up from £175 to £280. Now, a year later, the government has introduced more court fee increases to possession claims, a move which many believe will penalise landlords further.
As of 9th March 2015 new fees for possession claims have come into effect. High Court application fees now cost £555 (+15.6% over last year), County Court applications cost £355 (+26.8%) and PCOL online applications cost £205 (+30%) – a rise of £75 in each case.
Additionally, landlords seeking to make money claims will face even greater increases. While the fee for money claims ranging from £1 to £9,999 will remain unchanged, landlords bringing money claims ranging between £10,000 and £199,999 will face a fee of 5% of the claim. What's more, landlords who make a claim for £200,000 or more will face a fixed fee of £10,000. In all these cases landlords are facing increases of anywhere between 64% and 650%!
The MoJ has stated that these increases will generate an extra £17 million a year. Money which will be spent on the UK's courts and services in an effort to modernise and improve the efficiently of the British court system.
What do the increases mean for landlords and the property market?
When seeking repossession, landlords are already in a tight financial situation. Many will be suffering due to rent arrears or substantial damage to their property, so increasing court fees again will only add to their financial burdens. Many critics feel that this is unjustified, especially given the first round of court fees introduced in April 2014.
These rises in court fees could drive countless landlords out of the property market as many may feel that they cannot cope financially with tenants who fail to pay their rent or damage a property. The cost of pursuing a court case could out way any financial gain. However, should landlords leave the property market, this would lead to a shortage of rental properties which could drive up tenancy costs.
Landlord Action have been quick to criticise the escalating fees, saying that last year's rises were unjustified, let alone these latest increases. They continued to explain that additional costs have made little to no difference to the speed of court administration duties and therefore a second rise so soon after the first is not acceptable.
Landlord Action's founder, Paul Shamplina, also spoke on the matter, indicating that these fee rises will have a huge impact on landlords and letting agents who need to start eviction proceedings. These price increases will also discourage new landlords from entering the property market, which, at a time of severe rental stock shortage, is concerning.
Here at CPS Homes, we support our landlords and wholeheartedly back them in any action they may take against these extreme rises. If you're a landlord with questions about evictions or the fees you'll now be facing, please give us a call. We'll be happy to answer any and all questions and offer advice and guidance.
