Latest severe tenant arrears rise highlights importance of right landlords rent insurance

If there is one recurrent worry for landlords both new and seasoned, it is the possibility of tenant rent arrears – especially when those arrears are severe. Irrespective of their extent, they can cause great frustration for buy-to-let investors, bringing unwanted financial uncertainty that makes it more difficult to invest in and grow their portfolios. It’s why the right rent guarantee insurance from a provider like Advanced Rent (http://www.advancedrent.co.uk) can be so attractive, and a new warning has now come in the form of increased severe rent arrears for tenants.

According to the latest Tenant Arrears Tracker of LSL Property Services, the second quarter of the year saw an increase to 98,000 in the number of tenants in the UK in severe rent arrears. The 3.3 per cent rise in the number of tenants in severe rent arrears – defined as those who are two months or more behind on their rent payments – brought the number to the third highest level ever recorded. However, the figures did bring some good news for landlord rent insurance policyholders, with tenancies in severe arrears still representing a small minority of all those in England and Wales, at 2.4 per cent – even if this was up from 2.3 per cent in the first quarter of 2013.

Indeed, tenant finance actually improved overall during the period, with only 8.2 per cent of all rent in May being late or unpaid, compared to the previous month’s 8.4 per cent figure. Paul Jardine, director and receiver at Templeton LPA, the specialist practice of LPA Receivers, hailed tenants’ generally “great resilience to setbacks” so far, adding that he expected a halving in the proportion of all rent in arrears between 2008 and 2018. He said that tenants had been helped in their efforts to keep up with their rent payments by slower rent rises in recent months – all very encouraging news for landlords making use of rent factoring.

However, Mr Jardine warned rent indemnity policyholders that there was a “longer-term battle” with other forms of inflation, in addition to unemployment and low wage growth. He said that the Bank of England’s target for consumer inflation was being persistently outpaced, “escalating much faster than either rents or wages.” There was also an increase in the first quarter of the year in the number of tenants facing eviction via court order, by 4.9 per cent to 28,473 – all suggesting that many landlords could still do with the extra help with dealing with rent arrears.

Such help could be forthcoming from such products of Advanced Rent (http://www.advancedrent.co.uk) as Rent In Advance, which enables landlords to guarantee their cash flow in the form of six months’ rent upfront, every six months, or Rent Guaranteed, a more conventional rent guarantee scheme that ensures that landlords receive their rent on time every month. We build long relationships with our landlords and can be easily contacted online, by phone or via email.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.