Further to the recent demise of London Housing Solutions, a company claiming to offer “guaranteed rent”, but which went bust with over £400K of landlords’ monies, the Telegraph has reported on the pitfalls of certain rental guarantee schemes.
The article set out to explain that things can go wrong in “guaranteed rent” schemes if the scheme provider does not have the financial resources or inclination to back up the guarantee.
The article encouraged landlords to understand the structure of the rental guarantee, as they do differ, and also to due diligence on the company to check that they have a proven track record of running the scheme and that the company is in robust financial health. It was also recommended to let through an agent who had client money protection in place and was a member of an Ombudsman scheme. This gives landlords peace of mind that their money is protected and that they have a route of redress if anything does go wrong.
Northwood M.D. Eric Walker was pleased to be quoted in the article as a company that had an 19 year history of offering “Guaranteed Rent”.
Walker said some guaranteed rent companies take on too much risk without the resources to back up their guarantee and have tried to grow too swiftly, exposing themselves and their clients to enormous risk. “Over nearly 20 years we have grown steadily and organically within our means”.
“People think offering guaranteed rent is easy but it’s actually not,” he said. “We’re extremely selective about both the properties and tenants we take on although we do let to some benefit tenants. Nevertheless, we are extremely careful to whom we let to as ultimately, its our money at risk. We have the resources to both guarantee the rent and pay the legal fees in the rare eventwe need to evict a tenant.”
Walker pointed out that a lot of companies offering “guaranteed rent” are actually selling rent guarantee insurance policies – something completely different.
“Like any insurance policy there will be excesses and exclusions. Some policies won’t pay out until a tenant is one or more months in arrears but that can be enough to create a serious cashflow problem for many landlords,” he said.
Northwood welcomed the opportunity to be included in an article that will go some way to educating landlords as to what to look out for and how to avoid unscrupulous operators or those of limited financial backup.
Northwood is voluntarily registered with the Property Ombudsman and also a founding member of SAFEagent, the signpost to agents with recognised client money protection in place. We take consumer protection very seriously and our 80 branches endeavour to operate to the highest professional standards, giving landlords and tenants a happy and hassle-free lettings experience.
Northwood is also delighted to be endorsed by Landlord Action the eviction specialists who help landlords and their agents deal with problem tenants and regularly feature in the media.
Northwood is an established, widely recognised estate agent in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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