Landlords Lose Billions To Rent Arrears And
Rental Property Damage Each Year

New research claims that private rental sector (PRS) landlords, who operate their rental property businesses without specialist insurance in place, are losing almost £10 Billion (GBP) a year because of tenant’s causing damage to rental properties and unpaid rent arrears.

The report published by Access Legal reckons that tenants cause approximately £4.5 Billion (GBP) worth of damage to rental properties in the UK each year and PRS landlords can spend approximately £9.9 Billion (GBP), covering property damage, avoidable repairs and rent arrears, each year.
The research found that:

• 33%of PRS landlords think current legislation is mostly in favour of tenant’s
• 20% of PRS landlords have had their rental properties vandalised in the last year
• 40% of PRS landlords have had tenants miss rent payments in the last year
  • 46% of tenants in rent arrears failed to pay, even after court proceedings
• 75% of PRS landlords stated that they didn’t feel their money was safe with a letting agent.
  • 43% of PRS landlords stopped using letting agents in order to save money and avoid safety issues.

However, landlords can avoid some of the pitfalls highlighted by the research by utilising specialist insurance policies to safeguard their vital rental income and protect their rental property assets against damage caused by tenants.Rent protection insurance is provided on the basis that tenant’s have passed comprehensive tenant referencing checks and works to protect the landlord’s rental income should the tenant fail to pay the rent. The policy also covers legal expenses up to £50,000 (GBP), associated with evicting the defaulting tenant.

Tenant’s liability insurance protects a tenant’s deposit funds should they cause damage to a rental property. Accidents can happen but if damage is caused by a tenant then it is the tenant’s responsibility to pay for the damage, which can be expensive, or the landlord would be entitled to deduct the cost of repairs from the tenant’s deposit.

Landlords should take positive action to protect their rental property assets and safeguard their rental incomes and it is worth noting that the five most common causes of damage to rental property are:

• Broken Appliances – 41%
• Damaged Decorating – 40%
• Damaged Carpets – 37%
• Cleaning Issues – 33%
• Garden Maintenance – 24%

Ensure all prospective tenants are fully tenant referenced before granting a tenancy and made aware of their repair and maintenance responsibilities during the term of their tenancy. A full inventory should be conducted with the new tenants at the start of a tenancy and photographic record should be made for every item. This can help avoid disputes should damage occur.

This was written by Mike Clarke. Posted on at 10:30 am. Filed under Insurance. Tagged appliances, broken, carpets, cleanining, damage, decorating, deposit, funds, garden maintenance, insurance, issues, landlords, legislation, letting agents, maintenance, missed rent, money, obligations, policies, policy, properties, property, rent, rent arrears, rent protection, rental, repair, repairs, responsibilities, Safety, specialist insurance, tenancy, tenant liability, tenants, vandalised. Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.