Tenant staying on past their notice period

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A
Ashlets
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It's a long story.
I rented a house on a 6 month AST to a tenant in October 2006.
I realised that the house might be better suited to students and, in order to give the tenant plenty of warning, served a section 21 notice in February 2007, requiring possession on 25th August 2007.
The tenant was not best pleased and verbally gave two months notice to quit on 25th April - at the end of the AST - which I accepted.

The course of renting ne'er did run smooth.
The tenant has told me that he has a house lined up but cannot get it until mid may as the tenants in his target house have to be given notice and have not moved out yet.
I agreed on the phone to let him stay on beyond his notice period for up to a further month. He wanted to use the deposit as rent for that month, but I insisted he pay up front (which he has done) and I promised to refund him not only the deposit, but any unused rent at the time of him moving out.
However, recently he has been a little bit cagey on the phone about his "new house" and has been talking about looking elswhere as well.
In the meantime I have found a group of students who (on the assumption he is moving out) are expecting to take on the tenancy on 1st July.

Now I can list quite a few things I've done wrong here (e.g. not getting his notice in writing) and doubtless other people can add to them. But my tenant hasn't returned any of today's calls to his mobile and I am now thinking - oh sh*t

a) The only bit of paper that gives me possession is the notice I served for 25th August.
b) The quickest I could now secure guaranteed posession is to serve a new section 21 which would give notice for the 25th July - that being rent day two months down the line. If it all went pear shaped, I would then have to go to court with an N5B (12 days to process - 14 days to receive judgement) which gets us into mid August and then wait 4 weeks for Bailiffs, so securing possession for mid September. By that time my students may well think that I'm a bit crap and will have found another house.

The tenant is a good tenant - he has paid on time, looked after the house and I think genuinely wants to move out and to somewhere cheaper. Things have been a bit strained over a couple of the viewings. Cash is an issue and he is anxious that I should be able to return his deposit on the day he moves out as he will need it for his next house.

What I am trying to work out is how I can maximise my chances of getting him to surrender the tenancy in time for my students to move in, without alerting him to the relatively legless situation that I find myself in legally.

Could I
a) suggest he moves in with friends and give him a cash inducement to sweeten the load for his friends (bearing in mind I might as well pay him some money up front as pay the court and baliffs a load of money down the line).
b) offer him short-term rental in another nearby property which I expect to complete on soon - I was thinking I could let it to him as a holiday let which would have different possession requirements.

Or should I just bite the bullet, sweat out the legal process and hope that giving him a notice that expires on the 25th of July doesn't give him the idea of staying until then - or even longer.

Help ?!

13/05/2007 00:00

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