Monday, March 02, 2009
Three-quarters of all calls to a national helpline are currently from landlords worried about tenants not paying their rents.
Out of 30,000 individual telephone calls in the past 12 months, an average of 2,500 a month, of which 74% are from landlords seeking advice on how to deal with tenancies when rental arrears start to build.
This hints at a potentially rising problem.
The growing number of tenants defaulting on their rent is leaving more landlords unable to meet their mortgage payments.
Landlords that have their properties let and are on a variable rate mortgage are seeing record rental profits. However, a tenant in financial difficulty that can't or wont pay their rent could rapidly swing this around. A period of rental voids could swing a profit into loss very quickly particularly where the landlord has to obtain possession of their property through a protracted court case.
It is possible to guard against non payment of rent by your tenant using rent guarantee insurance. More landlords are considering this option as the economic storm clouds in the economy darken.