The number of tenants in arrears has gone up by 24% in the last year, according to the Tenant Arrears Tracker, published by Templeton LPA. Templeton have found that more than 100,000 tenants in England and Wales were in severe arrears in the second quarter of 2012- the highest figure since they began compiling the Tenant Arrears Tracker in 2008.
This will not make pleasant reading for those property owners looking for cheap landlords insurance quotes, especially those who need a regular income from rents to meet their mortgage payments each month.
However, it is important to keep a sense of perspective because only 2.6 per cent of private tenants are in arrears. Faced with a tenant who does not pay the landlord often has to resort to taking legal action and Templeton report a 6 percent increase in court orders in three months.
Many landlords are enjoying record low interest rates and may be able to withstand a loss of income. They have the choice of waiting for the tenants to make up the arrears or removing them and finding new tenants. The most important thing is to keep on top of the situation so that you can take an informed decision before a bad situation gets worse. If using a solicitor to chase the rent and/or evict the tenants make sure you instruct a specialist firm that can take action quickly and economically.
Although it is never possible for landlords to avoid the risk of rent arrears altogether it is possible to reduce the risk. Careful tenant referencing before the tenancy begins is essential and insisting on a guarantor is often a good idea. Rent guarantee insurance is also something to consider.