LANDLORD RENT GUARANTEE INSURANCE


Landlord possession claims in England and Wales are on the rise as rent arrears sky-rocket according to a recent government survey.

The Government’s quarterly Court statistics found that in the second quarter of 2012, there were 25,422 landlord possession claims leading to an order being made on the seasonally adjusted basis. This is a little up than in the first quarter of 2012 and continues the rising trend since 2010.

Landlord possession claims leading to orders made in England and Wales are up by 8% year on year to the end of the second quarter of 2012.

Regions with significant rises include: Gloucestershire increased by 29%, West Sussex increased by 20%, and Hampshire increased by 29%. UK towns have also seen large rises such as Bournemouth up 30% and Croydon up by 28%.

But while there has been a steady growth in severe tenant arrears this year, there has been a slight reduction in the number of tenants facing eviction through court order on a quarterly basis.

In the second quarter of 2012, 25,422 tenants faced eviction notices, a quarterly fall of 6% compared to the previous quarter, reversing the previous 6% quarterly increase. However, evictions remain 8% higher on an annual basis.


Michael Portman, managing director of LetRisks, a specialist provider of risk management and insurance to the residential let property market, says: ‘We have seen a sharp increase in demand for rent guarantee insurance as landlords and agents look to find ways to protect their rental income.

‘It is clear that this problem is not going to go away and we expect tenant arrears cases to continue climbing during the remainder of this year.

‘The double dip recession is putting huge pressure on the nation’s pockets, adds Mr. Portman. ‘Rising fuel and food, unemployment and increased rents is putting tenants in difficulty. Many tenants have fallen on bad times and have no financial resources to clear arrears debt has led many agents and landlords to pursue possession only, foregoing any attempts to secure rent arrears through the courts.

‘For many Landlords and agents, they face better odds securing new tenant rental income than they do securing rent arrears from an existing tenant.

‘My advice to landlords and agents is make sure that they consider the strength of the tenant when letting the property by taking out full references and to consider specific insurance through a specialist company for loss of rent if the tenant defaults and the cost of legal expenses,’ he concludes.

If a tenant is having difficulty paying the rent or has failed to do so, it always pays to act immediately by putting a sturdy rent pursuing timetable in place.

This is not the time for a soft-heart; loss of rental income could have serious implications for your buy to let business.

Your timetable should include initially speaking to the tenant in person, writing a letter threatening legal action and then serving notice.

Buy to Let News
Buy To Let Landlords Plan to expand - A survey of landlords carried out by a Buy To Let Property...