How Landlords Can Ensure The Rent Is Paid

Thursday, January 8, 2015
One In Three Tenants Struggling To Pay Rent

One In Three Tenants Struggling To Pay Rent To Landlords

1 in 3 Tenants Without Rent Protection Insurance
Struggling To Pay Rent

New research by the National Housing Federation (NHF) has found that 3 Million tenants in the UK’s private rented sector (PRS) who’s landlords don’t have rent protection insurance, are still struggling to pay their rent.

According to the study:

  • 31% of tenant couples in PRS properties find it difficult to keep up with their rental payments.
  • 41% of renting families with children struggle to pay their rent.
  • 8% of all PRS tenants struggle to pay their rent in full every month.

PRS landlords can alleviate some of their tenants financial worries by making use of specialist insurance policies designed to ensure rent is paid should the tenant suffer an unexpected change in circumstances, such as losing their job or becoming too ill to work.

Chief Executive of the National Housing Federation, David Orr, stated that the survey’s findings were unacceptable, saying “The UK has too many renters just keeping their heads above water. The government needs to come up with a bolder, long-term plan for house building so that families across the country can find the homes they need, at a price they can afford. We’re calling for all parties to commit to end the housing crisis within a generation.”

The NHF research found that tenant families with children are reducing their spending on everyday essentials in order to try and keep up with their rental payment obligations, with:

  • 27% of tenants cutting back on food and shopping expenditure
  • 24% of tenants have cut back on heating and energy usage

1 in 3 PRS tenants living in rented accommodation without Rent Protection Insurance in place are worried that their rents will increase and become even more unaffordable, with 15% of PRS tenants surveyed claiming they have suffered from stress and anxiety as a direct result of these concerns.

Whether landlords own a large portfolio of rental properties or have just a single buy-to-let property investment, the non-payment of rent is becoming an increasingly common problem for many private rental sector landlords.

Tenant referencing and credit checks conducted on all prospective tenants should reveal if the applicants can afford to live in the rental property before a tenancy is granted, and rent protection insurance can be utilised by landlords should the worst happen and the rent suddenly stops.

The Legal 4 Landlords Rent Protection and Legal Expense Insurance protects landlords from defaulting tenants by ensuring that rental payments are paid direct to the landlord in full.

Once a claim is received, the Legal 4 Landlords claims department will review the claim within 7 days, and arrange for the equivalent monthly rental value to be paid to the landlord as soon as possible.

Legal 4 Landlords will then assess the rent arrears situation and determine whether legal action to evict the tenant is also possible.

Once the tenant has failed to pay 2 monthly rental payments (typically 8 weeks) then Legal 4 Landlords will begin legal action to evict the tenant.

Once the tenant has been evicted and the landlord has been granted vacant possession of the rental property, Legal 4 Landlords will continue to pay 50% of the rental income for a further 2 months.

If the tenancy ends before the expected end date for the rent protection insurance policy ends, then the landlord can transfer the rent protection insurance policy to cover new tenants, provided that they pass a full tenant reference completed by Legal 4 Landlords.

As we previously reported, more than £800 Million (GBP) is currently owed to landlords in unpaid rent across the UK, with UK PRS landlords owed around £1,649 each, in outstanding rent.

2015 could see rent increases for many tenants with increasing mortgage repayments for landlords due to rising interest rates, and landlords are encouraged to act now to protect their tenants finances and ensure regular rental income.

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.