It is estimated that up to an alarming 50 per cent of units on some new developments are being purposely left empty by investors waiting for prices to rise, so they can make a profit by selling them on.
How to evict squattersThis leaves these dwellings at risk from squatters who invade a property, destroy sanitaryware and other fixtures and can render an investment unsaleable within a very short timeframe.
So, what can an investor do under these circumstances?
Research conducted by Inside Housing at the end of last year found that up to 50 per cent of new flats in Leeds were being left empty, 40 per cent in Salford and 10 to 15 per cent in East London.
The trend continued in all major cities across the UK, with 24 per cent of new dwellings left empty in Manchester, 30 per cent in Hull, 16 per cent in Nottingham and equally large proportions in Newcastle and Liverpool.
And all this at a time when affordable homes were and still are in short supply for first-time buyers.
It is perhaps little wonder the situation caught the attention of government ministers, who are currently drawing up new legislation which proposes to combat the empty home problem with tougher tax sanctions.
There are of course good reasons why some investors choose to buy-up residential units on new developments, leave them empty for six months or longer and then sell them on … sometimes the way to make a profit is simply to do nothing at all.
Fears about sales
In a buoyant market, time is the only element required to realise substantial capital value growth. Some investors are fearful of letting property they have bought.
They may be concerned about acquiring vacant possession at the most lucrative ‘selling’ time or be worried about tenants damaging the property.
Whatever the reason, it seems a growing number of investors prefer to leave starter homes empty and make their money from a gradual rise in the property market.
This route to profiteering leaves this group of investors’ properties at serious risk from unlawful occupiers.
Experienced home-grown and a rising number of immigrant squatters are now prevalent in every major town and city throughout the UK – and many see new houses and apartments left purposely empty as an opportunity too good to miss.
Legal procedure
The good news is there is an established legal procedure through which investors can deal with the problem of squatters and regain legal possession of their property quickly.
This will not however resolve any issues of damage caused to the dwelling, which can only be prevented by investors keeping a close eye on their investment and acting fast to eject any uninvited intruders.
Maximising security should be the first consideration after any purchase, because squatters are not permitted to break into a dwelling – but they can acquire limited rights if they enter without causing damage, such as by gaining access through a vulnerable door or window.
While a squatter is widely recognised as being a person occupying a property without permission from the person entitled to possession – there is actually no acknowledged legal definition of the term.
The correct word to describe such a person is actually a ‘trespasser’, which is the term used in law and by the courts. It is a common misconception to believe that squatting is illegal. In fact, it only becomes illegal if the squatter fails to leave the premises within 24 hours of receiving an Interim Possession Order (IPO).
Obtaining an Interim Possession Order (IPO)
The Criminal Justice Act of 1994 introduced IPO’s and new regulations under the Civil Procedure (Amendment) Rules were created in 2001 to further strengthen the rights owners have to deal with squatters blighting their property.
The new rules effectively created a ‘fast-track’ procedure. Other than in exceptional circumstances, an application for an IPO is made through the County Court.
The standard claim forms required to start the process are Form N5 (possession of property) and Form N121 (particulars of claim relating to trespassers). Both forms can be downloaded from the court service website at gov.uk
An application can be made on one or all of the people occupying a property and, if the names of the people are not known, the phrase ‘persons unknown’ can be employed.
A hearing will normally be arranged where the judge will make a decision on whether to grant the claimant an IPO, regardless of whether the applicant or the person or persons accused of being trespassers attend.
This kind of hearing usually takes place in ‘chambers’, which is a private room used by County Court judges. The judge will consider the claimant’s written evidence together with any additional information supplied by witnesses.
The judge may ask the claimant or the accused trespasser(s) questions about statements given, which will help him come to a decision.
In rare circumstances, the judge may decide to postpone or wave the hearing in favour of an ‘open court’ hearing, which will be held at a later date. This decision is usually only made when there are unusual circumstances or more information is required to settle the issue.
It is more common at the end of the first hearing for the judge to make an order that the trespasser is occupying the property illegally.
The trespasser(s) must leave the premises within 24 hours of the order being issued and, if they don’t, the police can be called in to physically evict the trespasser(s). The police will ordinarily ask for sight of the original IPO issued by the County Court and for evidence proving the claimant’s identity, before forcibly actioning the order by evicting the trespasser(s).
Exclusions
To deploy the fast-track procedure, claimants must submit a claim for possession within 28 days of becoming aware premises are being occupied without their consent.
The procedure cannot be used against current or former tenants or licensees, as the familiar tenant possession procedure takes precedent in those circumstances.
The fast-track procedure can only be used when the claimant or someone authorised by the claimant (such as a tenant or leaseholder) is prohibited from exercising their exclusive right to occupy the property due to the trespasser(s).
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Daniel Peacock