There is some evidence that rents are continuing to rise against a background of shortage of supply and increased financial hardship being experienced by tenants.
LSL are claiming that this is the first time since they have been monitoring activity in the PRS that there has been a rent increase in January, which has traditionally been a relatively quiet month. LSL in their most recent Buy to Let index, are claiming that 10.7% of all rent was either late or unpaid in January. This is a slight increase on December, and brings the total amount of unpaid rent to over £300m.
Landlords are responding by taking out rent insurance, and one of the providers, Let Alliance, are claiming that they are now providing rent guarantees to nearly 50% of all tenancies for which they provide references. The rent guarantee insurance costs £60.00 per year irrespective of the rent. Apparently there is no excess to pay.
This is an interesting development; our rent arrears have fallen in the last two months, and currently are at less than 2.7% at the start of a month and down to less than 1% by the end of the month. None-the-less, we have to chase harder to manage arrears than we used to, and we have taken the view that we need to be even more careful about whom we accept for tenancies. References from both previous landlords and employers are followed up with Telephone conversations if there is any doubt.
If any client is anxious about arrears and would like to discuss strategies for protection, please do not hesitate to get in touch. If you would like us to arrange rent protection insurance, please call.