The number of tenants falling behind with their rent payments has more than doubled over the past six years. In the first nine months of 2013 the Money Advice Charity’s telephone helpline received nearly 20,000 calls from people behind with their rent, which represents a 37% increase compared with the 2011 figure.
Rents across the country have risen to an all time high and a recent survey found that 31% of people paying a mortgage or rent spend more than a third of their disposable income each month doing so. The rent that tenants pay should be no more than 40% of gross earnings under the recognised thresholds that tenant referencing companies use.
‘Rent arrears are becoming the fastest growing debt problem in the UK and this is a big problem for landlords across the UK. In fact, the number of landlords and agents seeking vacant possession through the courts is at its highest level since 2009 and up 12.7% in 2012 on the previous year,’ said Richard Francis, director and founder of online letting agent Makeurmove.
‘It is vital that landlords screen potential tenants, as it is easier to avoid arrears, than it is to recover them. Non payment, late or partial payment of rent remains the biggest worry for landlords. Good letting agents like us are highlighting the risks to landlords and are recommending strict vetting procedures, backed up with rent and legal protection insurance to help landlord against the non payment of rent,’ he explained.
‘Good communication is critical in preventing arrears. It is important to start the dialogue as soon as you know your tenant is experiencing financial pressure. Take a professional and understanding approach and have a clear process to follow if arrears continue,’ he added.
Meanwhile, landlords are also facing rising numbers of tenants from hell, according to Balgores Property Group, and independent estate and lettings agency group based in Essex.
There is a plague of bad tenants who are causing unprecedented problems, said Howard Lester, director of Balgores Property Group, which has seen a rise in the number of landlords contacting the firm to manage their properties, after experiencing difficult tenants.
‘Recently, a landlord came to us for some help, after his tenants had stopped paying the rent after nine months and prevented any access to the property. It was not until bailiffs broke the locks after a court possession order, that it was discovered that the property had been completely stripped bare. The tenants had taken the central heating, light fittings, carpets, a shower cubicle, curtain and blinds, plus the all of the landlord’s furniture,’ he explained.
‘While this is an extreme case, there has been a rise in the number of bad tenants. This is even more of a reason why landlords have to be careful to take all the necessary steps to protect their property,’ he added.
He pointed out that landlords can take suitable measures to insure this does not happen to them. ‘The most important thing to prevent damage is finding the right tenant. Of course you can only obtain certain amount of reference, but these won’t paint you the full picture of the tenant. However, if you can get a positive landlord or previous agent’s reference, this has been proven to reduce issues during tenancies,’ said Lester.
‘The next step is to maintain a consistent level of property inspections. If you can build a good relationship with your tenant and inspect the property on a quarterly basis, this will deter tenants from causing damage. Whilst inspecting properties, it is important that you make reports and take photos. Too many agents and landlords will only scribble notes on a small piece of paper, never giving you a full picture of the condition on a quarterly basis,’ he explained.
‘Finally the best step is to have a fully detailed inventory of the property. Many landlords believe if a property is unfurnished an inventory is not needed. On a standard two bedroom apartment which is unfurnished, the inventory consists of 50 to 55 pages. The detail shown on a professional inventory is everything from light fittings and light switches, to the insides of cupboards and draws. This is the best way to ensure you get money from the tenants deposit to cover any damage they might have caused. With an inventory, you are 51% more likely to obtain the full amount you are claiming for,’ he added.
