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Is Rent Protection Behind Fall In Number Of PRS Repossession Claims?


Thursday, February 19, 2015

More PRS Landlords Using Rent Protection Insurance

More PRS Landlords Using Rent Protection Insurance

More PRS Landlords Using Rent Protection Insurance
To Avoid Rent Arrears

There has been a significant increase in the number of UK landlords using Rent Protection insurance to guarantee continuous rental income from tenants during the course of a typical tenancy in the private rental sector (PRS).

New figures published by the Ministry of Justice show that UK County court bailiffs repossessed just under 42,000 properties from all UK housing sectors during 2014, the highest annual recorded figure since the start of the new millennium.

According to the Ministry of Justice data, the total number of UK property repossessions in 2014 was 41,965, up 11% on 2013 property repossession figures.

The initial data may appear to be somewhat alarming but it isn’t all bad news, there has been a significant drop in the number of private rental sector (PRS) landlords seeking possession of their rental property assets due to increasing rent arrears.

This is in part due to the continued development of specialist insurance products for PRS landlords and their tenants, such as Rent Protection insurance, where for as little as £60, the landlord can take out a policy that ensures they will continue to receive regular rental income.

More and more PRS landlords are discovering the benefits of Rent Protection Insurance, as it provides both the landlord and tenant with peace of mind that the rent will continue to be paid even if the tenant’s personal circumstances suddenly change and they lose their employment status.

Ministry of JusticeThe Ministry of Justice data provides a breakdown of property possession claims made in 2014, showing:

  • 62% of property repossessions were made by social landlords
    (Local Authorities / Housing Associations)
  • 13% of property repossessions were made by Private Rented Sector (PRS) landlords
  • 25% of property repossessions were accelerated claims
    (Section 21 notices – when a landlord only claims possession of their property, not overdue rent).

Tenant evictions and rental property repossessions are the last course of action open to PRS landlords but such actions don’t make good business sense.

Only 7% of all PRS tenancies are ended by landlords because PRS property repossession incur additional expenses for landlords in the form of court costs, loss of rent, letting agent fees and council tax charges. Increasing delays in the judicial system, due to the lack of local courts to hear an increasing backlog of cases, can cause landlords even further financial stress.

PRS landlords should always try to establish good lines of communication with their tenants and build strong working relationships with them to increase stable, long-term tenancies. Tenants should be properly tenant referenced and informed about Rent Protection Insurance by landlords and enter into tenancy agreements fully aware about the opportunity to protect their rental payments.

 


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.