Rental costs outstrip gross income in the UK

Rental costs for private property tenants in the UK have risen by 60% over the last 10 years, outstripping gross income which has only gone up by 31%, according to new research.

The pressure to pay rent and meet all other outgoings has intensified and Shelter reported earlier this month that 1.4 million people in Britain are falling behind with their rent or mortgage payments.

The number of people struggling to pay their rent or mortgage each month has increased by 44% over the past year, to 7.8 million people. Their research also revealed that over the past year almost a million people used a payday loan to help pay their rent or mortgage and some 2.8 million people used an unauthorised overdraft to help pay their rent or mortgage and of those 10% did so every month.

‘These uncomfortable statistics highlight the need for letting agents and landlords to carry out thorough checks on applicants when letting a property to ensure that they can afford to pay the rent,’ said Michael Portman, managing director of specialist risk management and insurance company LetRisks.

‘Times are very tough for many tenants and demand for rental accommodation is on a sharp increase. Landlords and letting agents need to extra vigilant when they take on a new tenant.  But a few simple checks will help identify if a tenant is in a good financial position or not,’ he added.

LetRisks has put together some advice on the type of checks that agents and landlords should make when letting a property to a new tenant. This includes getting a credit check as individuals with good credit histories are generally good tenants.

It also advises obtaining references from previous landlords and employment references and if you have any doubts on the applicant’s ability to afford the rent, then ask them to provide further proof, for example copies of payslips or bank statements.

They should make sure that your tenancy application forms are completed in full. If an applicant only completes part of it, they may be hiding something, and arrange insurance cover for legal expenses and rent protection, to cover your Landlord’s potential liability should the tenant default on the rent.