Tag Archives: rent loss

Protect yourself from rental arrears landlords!

November 1, 2011


Protect yourself from rental arrears, don't be out of pocket!

This will be good news for landlords, but for tenants not so good!:

Rents keep rising and for the third quarter there is no exception . With a knock on effect to hit landlords, rental arrears also seem to be on the rise also.

A report done recently by LSL property services (LSL.L) shows that tenants in arrears have jumped to 19.5% in August. By the end of August, 10.7% of all UK rent was unpaid or late, which has increased from 9% in July.

“In the last two years, average rents have risen by more than £50 a months. With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long-term we anticipate that rental arrears will become a growing financial problem for landlords”, says David Brown, commercial director of LSL.

Joanna Elson OBE, chief executive of the money advice trust, says: “It is clear high rent costs are becoming more and more difficult for people to meet. With landlords pushing up rents this has left some people struggling to meet bills, particularly as this has coincided with a rise in inflation, particularly food and fuel costs.”

There are some steps that landlords can take to ensure the rent is paid and they are not left out-of-pocket…

Make sure you do your background checks…

Having credit checks done on your tenants are highly recommended to avoid arrears at all costs. Maybe think about lowering the rent slightly and have a good tenant in secure employment rather than loosing out altogether by having high rent and a tenant who can’t pay for it.

Any good letting agent will check the tenants references before even letting them view the property.

“We get reference from employers, from the previous landlord and from the tenant’s bank”, says Ed Peel of letting agent Winkworth. Getting just one reference from a previous landlord could mean they just want to get rid of the tenant, so landlords and letting agents need to be more efficient with this.

Make sure you know the housing benefit limits for next year!

Check my tenant, a company ran by the credit reference agency Experian, are a recommended referencing service available to landlords. It is £15 plus VAT for a check to see how suitable or unsuitable the prospective tenant is. This is there instead of landlords paying £25 plus VAT for a comprehensive report.

There are other companies who offer their services based on the Experian database, Endsleigh and rentchecks charge £6.95 and £9.95 respectively. Any information on credit card arrears are only available to mortgage lenders and any other suppliers of credit.

Beware of housing benefit changes…

Job loss for a tenant is a big thread to landlords and can easily put the tenant into arrears. With this, landlords need to know if the rent they charge goes along with the new lower levels of local housing allowance, which was formally housing benefit.

The new limits, coming into effect from January 2012, are starting from £250 for a one – bedroom property, £290 for a two – bed property, £340 for a three – bed property and stopping at the maximum limit of £400 for a four – bed property.

In January, the maximum rent payable by housing benefit will change and be reduced from average local rents to the value of the lowest third of rents. Most of the claimants, estimated to be at around 21,000, affected by the rental caps are in London. 775,000 tenants are affected across the country by the lower 30% benchmark.


We hope you found this information useful. Please remember to use CIA Insurance when you or your family and friends need motorcycle insurance, landlords insurance or commercial insurance.


Source- http://www.citywire.co.uk

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Vacant properties for three months a year…

October 17, 2011


Are you protecting yourself from unexpected rent loss?

One in three landlords has experienced at least one ‘void’ period where they had no tenants in a buy-to-let property in the last three months according to new research. The landlords who are experiencing a ‘void’ period usually have the average time without rent at 56 days, with some reporting properties being vacant for as long as 64 days.

There have been many reasons given for the gaps in rent received, with one of the most common reasons being the natural change over between tenancies. Another reason for the ‘void’ period was being able to find good tenants and unfortunately this can be a struggle, landlords are still worried about the economic situations of potential tenants.

Another reason for the ‘void’ period is caused by refurbishment and/or maintenance work having to be done on a property, more than one in eight landlords (13%) said that this was a cause of a short gap in rental income. This work may be regular maintenance or the result of an insurance claim, either way if you haven’t made room for this in your landlords rental budget the unexpected loss of rent could add to an already stressful situation.

By Buying a good insurance policy, which is tailored to suit the needs of landlords is key and the best way to ensure that your are protected and covered for all outcomes.

Whatever type of property you own, it is an investment that you need to protect carefully. This is where CIA Insurance comes in, because we are specialists in let property insurance. To get a quote visit www.cia-landlords.co.uk or call one of our experienced let property sales team members on 0844 88 88 323.

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