Tenant Rent Arrears Increase As PRS Rents Climb

Wednesday, July 22, 2015
Tenants without rent protection insurance are struggling to avoid getting into rent arrears as private rental sector rental prices climb

Tenants are struggling to avoid rent arrears as PRS rental prices climb

New Study Reveals More Tenants Are Struggling With Rent Arrears

Tenants without rent protection insurance are struggling to avoid getting into rent arrears as private rental sector rental prices climb 5.6%.

UK PRS rents have risen at the fastest rate since 2009, increasing at a faster rate than property prices for the first time since 2013 according to data collected by estate agencies – Your Move and Reeds Rains

With the rapid increase in private rental sector rental prices there has also been a sharp rise in rent arrears among tenants who don’t have rent protection insurance, with figures reaching 8.7% of all rent payable in June 2015.

The rent arrears figure may be lower than the market observed during the 2008 property crash and subsequent downturn of the global property market, however, it is still proportionally greater than the 7.6% recorded in May 2015, and 7.8% recorded a year ago.

Rent protection insurance is a valuable insurance policy for landlords and their tenants and ensures continuous rental income even if a tenant’s circumstances change dramatically overnight.

Whether landlords own a large portfolio of buy to let properties or have just a single-buy to let investment property, the non-payment of rent can be a serious and, according to the recent study, an increasingly common problem for many private rental sector landlords.

Even the UK’s leading tenant referencing system cannot predict if a tenant will be affected by unemployment, or suffer from a serious illness or accident which leaves them unable to work. But UK Landlords can avoid the inconvenience of rent defaults with 100% rental income protection offered by the UK’s leading supplier of specialist products and services to the lettings industry – Legal 4 Landlords.

PRS rents across the UK have climbed to a new average rental price of approximately £789 (GBP) per calendar month, increasing by 1.4% from May 2015 and thanks to the Government’s recent budget announcements that appear to target landlords, they are expected to increase even further, putting more financial pressures on tenants.

The latest UK Budget reduced tax assistance for landlords, which is likely to result in landlords trying to offset additional costs by passing them onto tenants, accelerating PRS rent rises further.

These rent increases could increase the financial pressures on many PRS tenants increasing the likelihood of growing rent arrears. Rent Protection insurance can help landlords avoid unnecessary problems by taking action to ensure continuous rental income is received.

This was written by Mike Clarke. Posted on at 1:41 pm. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.