Since the start of the recession demand for rented property has outstripped supply as many would-be buyers have struggled to get on the property ladder due to the challenge of raising large deposits.
Healthy competition in the rental market has ultimately led to an increase in rental prices for the best properties. But with food and fuel costs rising at the same time this has left many people struggling to afford monthly rental payments.
Graham Kinnear, Managing Director at Landlord Assist is not surprised by the findings of the research but is urging landlords to take early action to protect their income and prevent tenant arrears spiralling out of control.
He says: “The economic situation is really impacting now. We are referencing tenants who are wanting to trade to smaller properties as they are no longer able to afford their rent. There are increasing numbers who are being made redundant and increasing numbers who are finding it difficult to meet their rental obligations due to soaring fuel and utility prices.
“Landlords should take early action and seek professional advice if their tenants default on payments. Arrears situations rarely rectify themselves and in the current economic climate landlords need to protect their interests."
Stephen Parry, Commercial Director at Landlord Assist says: “The majority of the tenant evictions that we undertake are based on rental arrears although most tenant defaults nowadays are as a result of unforeseen changes to their personal circumstances rather than the wilful non-payment that is traditionally associated with ‘bad tenants’.”
Graham Kinnear adds: “Although no landlord can predict a tenant falling on hard times, performing credit checks at the start of an agreement can help landlords to assess the tenant’s ability to pay the rent. Landlords should also consider rent guarantee insurance policies to protect their income should a tenant fail to pay on time.”
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