Growing Concern Over PRS Rent Arrears

Tuesday, January 28, 2014
Protect Rental Income

Protect Rental Income

Over 67,000 PRS Tenants In Severe Rent Arrears 

There have been a number of reports published in recent months by various agencies regarding tenant rent arrears in the UK’s private rental sector (PRS), with the findings making grim reading for landlords who don’t have Rent Guarantee Insurance

LSL property services latest Tenant Arrears Tracker shows there was a 3.4% increase in the number of tenants in “severe arrears” in the final quarter of 2013. That amounts to some 67,000 PRS tenants are behind on their rents by two months or more. 

A report published by the Money Advice Trust in December 2013 said rent arrears are the UK’s fastest-growing debt problem, with the charity claiming a marked increase in calls to its National Debt Helpline on the issue.The charity claim that the number of calls received by them concerning rent arrears has increased by 146% since 2007, and the number of calls received were also up by 13% during 2013. 

In addition, a recent Shelter survey also reported that 63% of tenants are struggling to keep up with rent payments, with the problem being most severe for tenants with young families. 

The figures published in the latest Tenant Arrears Tracker by LSL, concur with the figures released by both Shelter and the Money Advice Trust, highlighting the increasing financial stresses faced by tenants as well as the growing concern for private rented sector landlords who don’t have rent guarantee insurance in place.

Sim Sekhon, spokesman for Legal4Landlords, specialist service providers to landlords and letting agents, said:” The number of landlords suffering rent arrears is a growing concern in the private rented sector, but there are alternative options that can be explored and utilised by landlords, such as tenant referencing to avoid landlords taking tenants with poor finances and questionable histories and rent guarantee insurance that can protect a landlord’s much needed rental income should a tenants circumstances change for the worse. Landlords don’t need to be at the mercy of a tenant’s finances and simple and effective specialist insurance products can save them a great deal of stress and money in the long term”. 

UK private rented sector landlords should take note of the warnings expressed by the Money Advice Trust and Shelter, but the continuing development of rent guarantee insurance products shows that there are solid grounds for optimism among smart landlords and their appointed lettings agents for 2014 and beyond.

100% Rent Guarantee protection

100% Rent Guarantee protection

This was written by Mike Clarke. Posted on at 11:45 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.