The latest research from the National Landlords Association (NLA) has revealed that almost a third of UK landlords experienced rent arrears in 2014. According to analysts the average UK landlord faces annual outstanding rental debts of £1,649, a figure that represents a national debt of £850 million across the UK. Furthermore, the NLA revealed that 22%, or approximately 300,000 British landlords are concerned that their tenants won’t be able to keep up regular rental payments in 2015.
The figures come from a recent campaign launched by the NLA titled ‘Rent, Risk Resolve.’ The operation highlights four key risks faced by landlords and aims to help them avoid jeopardising the profitability of their letting ventures. Rent arrears is one of the four major risks, accompanied by local landlord licensing, rising interest rates and the introduction of rent controls.
Carolyn Uphill, NLA chairman, explains, “All landlords will be affected by one or more of these issues to some extent somewhere down the line and it’s vital for them to keep in mind the major threats to the success of their business.”
The NLA maintains that no matter how large and profitable a portfolio the impact of these risks can cripple both personal and business bank accounts. Not only do rental arrears have a negative impact on expected income but they can also force landlords to miss mortgage repayments and put off carrying out improvement and maintenance work on the property. This can go on to affect credit rating, increase interest rates and escalate stress levels.
In order to help landlords avoid financial ruin and unnecessary anxiety the NLA is committed to supporting British property owners and helping them navigate the risks of letting. “As the largest landlord association in the UK, we have a duty to support and advise on how to plan ahead effectively and manage these risks,’ adds Uphill.”
Fundamental tips included in the campaign include building good relationships with tenants, meticulously monitoring receipts and budgeting finances in order to ensure any missed payments can be covered.
While renting out a property can be a fantastic way to generate an income it is important for all landlords to safeguard their investment with a comprehensive landlords insurance policy. Adding rent guarantee insurance to a policy will cover the cost of any lost rental income due to irresponsible tenants that fail to pay up.
More information can be found on the NLA website which offers practical guidance and assistance on how to avoid and manage rental arrears.