Challenging tenants are a major problem for smaller landlords, survey suggests

A lot has been written about the effect of regulation and tax change on landlords in the UK but new research suggests that challenging tenants are also a major issue for many.

Some 47% of landlords say that they have had issues with tenants who don’t pay their rent on time, according to a new survey from online letting agents MakeUrMove

It also found that a quarter of landlords have faced large bills when tenants have left properties in a state of damage and disrepair. Many have had to pay thousands to restore their property after a tenant has moved out, with one landlord surveyed left with £16,000 of damage.

Landlords say damage caused by tenants far outstrips the sum of the deposit usually taken at the start of the tenancy and held in the Government backed Deposit Protection Scheme.

The agent suggests that this kind of pressure is affecting landlords who try their best to support tenants to an extent that they feel they can’t continue to rent out their properties.

Indeed, the survey also shows that 98% of landlords believe it’s important to keep tenants happy and 92% believe that they have a good relationship with their tenants. Despite this some 37% say that their biggest worry is problem tenants.

MakeUrMove managing director, Alexandra Morris, believes that it is smaller landlords who are most affected and reckons that 60% of British landlords are ‘accidental’ or ‘casual’ landlords, meaning they only have one property and rent it out to supplement their main working income.

‘As these landlords make up the backbone of the British property market, it’s important they feel happy to carry on letting. Stress and financial pressures caused by challenging tenants is a sure fire way to put them off and steer them away from further investment,’ he said.

‘This could also be a real worry for smaller landlords when it comes to cash flow. Generally, as long the rent is coming in every month to cover mortgages and other associated costs, smaller casual landlords don’t often plan for bigger costs caused by damage from tenants or lack of funds due to unpaid rent. As a result, when a big outlay comes around, some landlords find themselves in trouble, and there’s very little protection offered from the government against these things,’ he explained.

They survey found a range of other issues faced by landlords. Some 26% cited tenants breaking items and refusing to pay, 16% tenants refusing to leave at the end of their tenancy and 22% problems over extra people living in the property who are not on the tenancy agreement.

The research report pointed out that unapproved tenants could potentially put the landlord at risk of breaching Right to Rent provisions, which may in some cases, amount to a landlord being found guilty of a criminal offence following changes to the Immigration Act 2016.

‘Legislation is currently swinging towards tenants, at the risk of undermining the vital role played by private landlords in the UK housing market. Legislation such as the proposed deposit cap could make it even harder for private landlords to deal with challenging tenants, resulting in further pressures on landlords to sell up,’ said Morris.

‘Whilst landlords selling their properties may appear to offer some short term benefits for buyers, it cannot deal with the systemic problems surrounding the lack of housing supply. It will also reduce supply in the rental sector, which will increase demand and likely only increase pressures on the remaining landlords to increase rents,’ he added.