This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Landlords in the buy-to-let sector are being advised to enhance their vetting procedures, after figures have shown an increase in the number of tenants in severe arrears by almost a quarter in a year.
The financial difficult of the country has meant static or lower wages and high levels of unemployment. Alongside rising rents and an upsurge in the cost of living, the amount of tenants in serious arrears, more than two months behind with rent, hit 100,400 in the three months to June. The Tenant Arrears Tracker study found that this is the highest number since records started in 2008.
Find the Right Tenant at the Start
There has been an 8% increase of tenants in serious arrears in those three months compared with January to March this year. This has caused a 6% rise in the number of landlords taking non-paying tenants to court to evict them over the past three months.
Chief Executive of mortgage broker SPF Private Clients, Mark Harris, recommends: “The best thing you can do is try and avoid this situation occurring in the first place; vet your tenants carefully, and check references to ensure they haven’t missed rent payments in the past.
“However, if tenants do fall behind with the rent, make sure you tackle the issue as soon as they miss their first payment, rather than letting arrears mount up and getting to a stage where eviction is the only option.”1
Harris explains how tenants in arrears can be dealt with: “These can be resolved fairly easily, but if they have lost their job and are in financial difficult, you may need to give them longer to pay or reduce their rent for a period of time.”
Harris says that this may be your option if you find them a “decent tenant”, and would like them to stay in the property. “If it is agreed,” he expands. “Get it in writing.”
If this is not an option for you, remember that it is a criminal offence to harass tenants and to attempt to evict them independently. “Take legal advice,” urges Harris. “Court proceedings are a hassle and expense but it is far better to get the situation sorted, the tenant evicted, and a paying tenant in their place than let the situation drag on for months on end.”
Bank computer glitches, such as the few suffered by NatWest, may be a current issue in this area.
