Landlords Suffering As Tenants Dodge Rent
By Alison Steed
REPOSSESSIONS of properties by landlords has fallen slightly in the last quarter of 2008, compared with the same period in the previous year.
Some 36,118 claims were issued using the standard and accelerated possession procedures, according to figures from the Ministry of Justice, and 27,715 orders were made.
This brings the total number of repossession claims for landlords to 148,040 for 2008, according to official figures, slightly higher than 146,950 in 2007, but significantly lower than the peak in 2006 when 195,473 landlord possessions were made in the courts.
Times are getting tougher in the buy-to-let market – the National Landlords Association has received 30,000 calls in the past 12 months to its advice line, and three quarters of these were from landlords seeking advice on how to deal with tenants’ rent arrears.
Buy-to-let repossessions by mortgage lenders have doubled in the past year to 4,000, according to Council of Mortgage Lenders figures, and buy-to-let accounts for more than 10 per cent of the lending market as a whole. One in 289 of all buy-to-let properties was repossessed by the lender last year.
Tenants failing to pay the rent is one of the main reasons for such problems arising, and is the biggest problem faced by landlords. But it is one that you can insure against, said Keshav Thukaram, managing director of Smartlandlord.co.uk, the property services website for landlords.
He added: “Mortgage arrears in the private rented sector are rising, particularly as a result of tenants failing to pay their rent. In uncertain times, landlords need to protect themselves against this."
"Unfortunately, many landlords are not yet aware that rent guarantee protection exists and letting agents are often dangerously complacent in promoting rent guarantee products as a means of fighting rental arrears, voids and the threat of repossession."
"We are working closely with landlords across the UK to develop solutions that can help the buy to let sector weather the storm. Next month, we will launch a comprehensive range of innovative products and services, including rent guarantee insurance."
"A sustained campaign is needed to protect both tenant and landlord against the misery of repossessions. We are determined to be at the forefront of this campaign. It is vital that landlords take a proactive approach to managing their portfolio by making the best possible use of the tools available to them to save money and increase stability."