Members of the National Landlords Association (NLA) say rental arrears are up and many fear the problem is only going to get worse. Nearly half of NLA members have reported rental arrears in the last 12 months. The average landlord carries 12 units in a portfolio, and of those units an average of four of those tenants are late in rent payments to the tune of £2,363. Moreover, the NLA says that 16% of landlords who hold one property are taking financial losses on their investments. NLA officials say it is most advantageous for landlords to work with renters to help them get caught up because long-term tenancies are most prosperous, although landlords have the right to initiate repossession after a two-month delinquency. For more on this continue reading the following article from Property Wire.
Rental arrears in the UK’s private rented property market are increasing, according to the latest survey by the National Landlords Association (NLA).
Some 49% of landlords have experienced rental arrears in the last 12 months and 37% of landlords are worried about instances of arrears in the months ahead, it has found.
According to the research, a typical NLA member landlord, with an average portfolio of 12 lettings, has four tenants in arrears and the average arrears owed by tenants is £2,363. As might be expected, landlords with larger portfolios have greater amounts owed to them.
Arrears problems are also affecting small scale landlords, that is those with one letting and accidental landlords, who make up a large proportion of all landlords. In fact, 16% of landlords with one letting are making a loss on their investment.
‘It is a sign of the difficult economic conditions that so many landlords are experiencing rental arrears. In these circumstances, landlords should work with their tenants to minimise the impact of financial stress,’ said David Salusbury, NLA chairman.
‘Short term instances of arrears can often be resolved with a sensible repayment plan or a temporary reduced rent arrangement. It is in landlords’ best interests to help tenants through tough financial times where possible,’ he explained.
‘Landlords who work collaboratively with their tenants towards sustaining the tenancy for the long term will encourage prosperous tenancies. It is professional and collaborative working that will help ensure the private-rental market remains a promising investment opportunity, in turn helping to bring the economy back to an upward trend,’ he added.
The NLA advises advises landlords to make sure that when they are recruiting new tenants to carry out the appropriate tenant checks to ensure they are in a position to meet their rental commitment and when meeting new tenants to be open and approachable.
By law, a deposit must be protected in one of three government licensed schemes such as mydeposits. The Scottish law is slightly different but tenancy deposit protection remains a legal requirement.
It also says that is a tenant is experiencing difficulties paying the rent, arrange to discuss the situation and if the tenant has experienced a sudden change in circumstances, work with them to check they are receiving any benefits they may be entitled to. This could resolve the situation quickly and easily.
If the tenant is not entitled to additional funds, landlords should work with them to arrange a short term solution such as a repayment plan or reduced rent arrangement but if problems with payment continue despite a short term arrangement, it may be appropriate to negotiate bringing the tenancy to an early end in order to avoid accruing significant debts.
In situations where the tenant has failed to meet their rental payments for two months, the landlord is entitled to issue a Section 8 Notice to initiate possession proceedings. This must always be a last resort, says the NLA.
This article was republished with permission from Property Wire.