A recent survey by fintech company molo has revealed that landlords are growing increasingly concerned about their tenant’s ability to pay their rent, with 60% having seen a rise in late rent payments.
And 44% saying that this is their biggest cause for financial concern as they head into 2024. According to the research, landlords across the UK are owed an average of £725 in late and unpaid rent and have an average of 2.9 late payments per year. Landlords in Yorkshire and the Northeast have seen the highest number of late payments at around 3.4 per year, whilst landlords in London are owed the most at £806, unsurprisingly due to higher rental prices in the capital.
Amidst the cost-of-living crisis; with rising energy and food bills, the UK is feeling the squeeze, with renters being directly affected and struggling to pay their bills. To this end, 56% of landlords have reported they have had tenants move out as they could no longer afford the rent. Whilst 55% have also found themselves reducing the price of rent to support tenants during this time. This number increases to as many as 68% for landlords in the Greater London and Yorkshire regions.
So how can landlords support tenants during this uncertain period and help protect themselves against long-term unpaid rents? Here are some ways to effectively handle late payments with tenants, and make sure they are supported during the current challenging times.
Have honest conversations
Keeping communication lines open is key. 41% of landlords have had to evict tenants because of late payments but try and ensure you are having honest conversations first. Try to understand the issue and discuss the steps that you both might need to take to come to a solution. Eviction should be the very last resort and need to be handled legally through court proceedings.
Set up payment plans for unpaid rent
Over half (54%) of landlords have set up payment plans to support tenants with late payments at some point during their career as a landlord. This goes up to 77% for landlords in Birmingham. If your tenant does fall into rent arrears, you can figure out a repayment plan together. Discuss how much they can afford to pay each month, and compare this to your mortgage rate, to find an amount that will work best for both of you.
Look into what support is available
It could also be worth doing your research into what support might be available to your tenant, so you can pass on the information. The governments ‘Help for Households’ scheme has been set up to specifically help with the cost of living, and tenants might also be eligible for Universal Credit for housing costs, or a reduction in council tax.
Price fairly
If you’re looking to expand your portfolio, you need to choose an area and property which is a good investment for you. But you need to also make sure you’re setting the right rental price to attract tenants, especially amidst the current financial crisis.
If you’re a landlord experiencing late or missed payments and need some advice or assistance, Sinclair Taylor can help. We are the leading experts in debt recovery for the property sector, and offer a no collection, no fee service for rent arrears, with no upfront costs or contractual ties ins. Contact the team today.
Source: ukdcnews.co.uk
