According to a new report released earlier this month by Royal London, almost five million renters in the U.K. have no plans in place to cover their rent if they stop earning for three months or more.
Many landlords often say that they only let to “private” tenants, but a private tenant may only be a P45 or some form of crisis away from becoming a tenant who has to apply for Local Housing Allowance (now known as Universal Credit).
The report found that more than one in three renters in paid employment (34%) admit they don’t know how long they could survive if they lost their job or became ill, and six in ten people (60%) who had some idea said they could only survive on their savings for three months or less.
Their first port of call would be to apply for state benefits (53%), followed by reducing their household expenses (47%) and then dipping into their savings (39%).
These figures should be of interest to all landlords, because if a tenant loses their job, then their ability to pay the rent is impaired, and you may find that your tenant goes into arrears, leaving you to continuing paying the mortgage with no rental income.
Of course, applying for housing benefit is one option for a tenant out of a job or in crisis, but this can be a somewhat lengthy process and all housing benefit is paid one month in arrears, meaning you could still be out of pocket.
There is also the growing issue of affordability.
Recent reports indicate that 28% of the adult population are now accommodated in the private rented sector.
The most prolific renters (67%) are in the income band £10,000-£19,999, meaning that they might struggle as rents continue to rise, which they are, at the fastest rate in 6 months.
Rents reached an average of £793 in England and Wales in April – 2.4% higher that April 2015
Three regions – the East Midlands, West Midlands and the East of England – have now broken all-time records for rents.
So … tenants with limited financial resources, and rents rising could mean that rental arrears could rise.
As a landlord, this is your worst nightmare as you are left paying the mortgage and may have to seek possession of your property through the courts, which is costly and stressful.
However, never fear, Northwood’s Guaranteed Rent service is here!
Our market leading service is celebrating 20 years in operation and was designed to make all of the above market conditions and other landlord headaches and inevitable curveballs completely redundant.
The service is very simple: we guarantee your rent, whether the property is empty or the tenant stops paying.
Here is a reprise of our video that explains it:
Guaranteed Rent was specially designed for busy landlords who simply want to “let and forget” and who don’t want the hassle of a tenant not paying the rent or the property being void. We also have three other service level options that you can consider – from tenant find only to fully managed. Whatever your landlord style, we have an lettings service option to suit you.
To find your local Northwood office, please click >>> here.
Northwood is one of the most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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