Currently viewing the tag: "tenant rent arrears"
Buy-To-Let Mortgage Lenders Reducing Rates As Demand Soars

Buy-To-Let Mortgage Lenders Reducing Rates As Demand Soars

Buy-To-Let Mortgages Improving To Meet Increased Demand

UK mortgage lenders are offering more Buy-To-Let mortgages, with better rates on smaller deposits, in response to soaring demand from property investors and portfolio landlords over the past year.

Buy-To-Let mortgage lending increased by 18.6% in 2013 compared to 2012, according to the latest figures from the Council of Mortgage Lenders (CML).

The last quarter of 2013 also saw Buy-To-Let mortgage lending finish strongly, despite a predictable seasonal dip in December, with lending up 20% against the same period of 2012.

Demand for Buy-To-Let mortgage loans is picking up as landlords in the UK seek to expand their rental property portfolios, with over 30% aiming to buy more properties in the next 12 months and more than 80% of UK private rental sector (PRS) landlords are making a full-time living from their lettings activity according to the latest BM Solutions/BDRC Continental Landlord Panel.

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MP’s Claim Universal Credit Is Another Government White Elephant

MP’s Claim Universal Credit Is Another Government White Elephant

Universal Credit Roll-Out faces major delays

The current Local Housing Allowance (LHA) benefit system is likely to continue until at least 2017 for the majority of private rental sector (PRS) landlords and tenants in most of the UK, following major delays to the roll-out of the new Universal Credit system.

Universal Credit was originally due to be rolled out nationally to all new tenants claiming benefits from October this year, however due to continued problems, the controversial welfare reform measure will just be extended to an additional six jobcentres.

The delay is being blamed on poor IT by Government ministers, leading to claims that Universal Credit is just another Government white elephant.

Universal Credit was heralded by its proponents as an easier way to deliver state benefits including housing benefit or LHA and tax credits into one lump sum paid monthly to claimants, but its proposal saw an immediate backlash from PRS landlords, letting agents and landlord associations over the abolition of direct rent payments to landlords.

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Fall in the number of tenants in severe rent arrears

Fall in the number of tenants in severe rent arrears

The number of tenants in severe rent arrears declined by 15.6% during the final quarter of 2012, according to data released by Templeton LPA, part of the LSL Property Services group.

The data indicates that in the last quarter of 2012, almost 16,000 fewer tenants faced severe rent arrears of more than 8 weeks rental costs, compared with the previous quarter of 2012.

The number of tenants in this situation has dropped for the first time in over a year and could in part be due to the development and availability of Rent Guarantee Insurance products.

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Landlords Lose Out Due To Unexpected Costs

Landlords Lose Out Due To Unexpected Costs

If You Fail To Plan Then You Are Planning To Fail

A recent survey by a national lettings agency has highlighted financial losses incurred by UK landlords due to failing to adequately plan for unexpected costs.

 Landlords pay on average around £1500 (GBP) per year of their rental income covering tenant rent arrears, maintenance, repair bills and void periods; a figure that equates to over £2 Billion (GBP) per year nationally, according to the survey by Northwood.

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Private Rental Sector landlords are urged to act now to secure the tenant’s rental payments or prepare for the worst this year as tenant default rates have already increased by 8%, in the second quarter of 2012, and are still rising.

The number of private sector tenancies in severe rent arrears climbed by over 7,000 in the 3 months to June 2012 putting severe pressure on many landlords’ finances as well as adding to the tenants problems.

In the second quarter of this year over 100,400 tenants in England and Wales were in severe arrears, an increase of 24% compared to 2011.

Tenancies in severe arrears represented 2.6% of all tenancies in the UK private rented sector (PRS), up 0.2% on the previous quarter.

Tenant arrears are a serious issue for landlords, and private rental sector landlords need to take steps to ensure rent payments are assured.

Rent Guarantee Insurance protects landlords from defaulting tenants by ensuring that rental payments are made direct to the landlord in full.

If you are a Landlord who lets a buy to let property then there is always the risk of rent default by tenants. Even the best checks and references cannot predict a tenant falling on hard times and not being able to pay their rent, that’s where Rent Guarantee Insurance comes in.

Despite the number of severe rent arrears cases (tenants with rent arrears of more than 8 weeks) continuing to climb, the use of Rent Guarantee insurance products has already started to have an effect on the general level of tenant rent arrears with 8.9% of all rent in the private rented sector late or unpaid by the end of May, a decrease from 9.9% at the end of April 2012.

Eviction numbers increase as tenants struggle with finances

Evictions for Rent Arrears Increase by 10.2% This Year

County court closures are being blamed for prolonging tenant rent arrears eviction hearings

The number of tenants in severe financial difficulty has climbed by 10.2% in the first quarter of this year according to the latest tenant arrears tracker by Templeton LPA, part of the LSL Property Services plc Group.

Almost 8,800 more tenants were over 8 weeks in arrears and facing the threat of eviction than there were in the last quarter of 2011.

In the first quarter of 2012, an average of 94,400 tenants in England and Wales were in severe arrears, an increase of 20% compared to the same period in 2011.

The figures were affirmed by specialist landlord service provider, Legal 4 Landlords, who handle an average of 20 tenant evictions per day across the UK.

Legal 4 Landlords spokesman Sim Sekhon said: “At the current rate of growth, the number of PRS tenants facing arrears greater than 8 weeks will climb above 100,000 in the next quarter. Tenants have been facing increasing financial pressures due to the state of the economy and the rising cost of living and unfortunately landlords without rent guarantee insurance have been suffering the most”.

Although severe rent arrears cases have continued to increase, PRS tenancies in severe arrears only represented 2.4% of all properties in the private rental sector (PRS) in England and Wales in the first quarter of 2012.

Overall tenant arrears have improved, with 9.3% of all rent either late or unpaid by February 28th, a decrease from 10.7% at the end of 2011.

Paul Jardine, director and receiver at Templeton LPA, said: “While the general tenant population has absorbed the rising cost of renting in the last two years, a minority of tenants are facing severe financial difficulties, a minority that is growing. These tenants have been pushed into deeper and deeper arrears by a combination of rising living costs, high rents and a weak labour market, and are now months behind with the rent cheque. In turn, these severe rental arrears figures have been inflated by the ongoing impact of county court closures. The closures have prolonged arrears cases, with landlords less able to gain court dates to quickly remove non-paying tenants. This is creating a backlog of tenants in extreme arrears, increasing the amount of rental income lost for landlords or their appointed receivers of rent. Despite the recent surge in severe arrears cases, overall tenant arrears have performed remarkably well given the challenging economic environment. In fact, as we often see at this point in the year, more financially robust households are now paying down post-Christmas debt and putting their finances in order, which is helping to reduce the overall level of tenant arrears.”

The annual growth in tenant arrears has been matched by a yearly rise in the number of tenants being evicted by court orders.
In the last quarter of 2011 some 24,702 tenants faced eviction notices, an increase of 9% on the 22,634 in the last quarter of 2010, although the figures reported are 4% lower than they were in the third quarter of 2011.

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