Significant increase in serious rent arrears
Posted on January 7th, 2012
Posted on January 04th 2012
Companies providing landlords insurance and other services to the residential lettings sector should take note of the latest warnings about tenant arrears.
Recent statistics published by specialist receiver company Templeton LPA show that tenant arrears have climbed significantly over the past year. For example, figures show that during the last quarter of 2011, the number of tenants more than two months in arrears had increased by almost 11,400 compared to the last quarter of 2010.
Although most renters pay on time, the increased incidence of serious rent arrears could mean that more landlords experience cash flow problems. They may be unable to meet their buy-to-let mortgage repayments or indeed other vital expenses, such as landlords insurance.
Furthermore the statistics show that landlords are resorting more frequently to court orders in order to evict tenants who are in serious arrears. There is a rise of 11% in such orders over the past year.
One possible reason for this is the greater tenant demand than in previous years. Landlords are realising that if they evict non-paying tenants, they will have relatively little trouble in finding new tenants to take their place. They can often even put the rent up into the bargain!
Nonetheless, the recent increase in serious rent arrears makes it worthwhile to consider purchasing landlords insurance that will cover arrears in the event of a tenant defaulting.
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Tags: Arrears, Rent Arrears
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