A recent report sanctioned by the National Landlords Association (NLA) has generated concerning findings relating to rental arrears.
Figures from the Landlords Panel suggest that 49% of landlords have experienced rental arrears during the previous 12 months. 37% said that they were concerned about arrears during the coming year.
As to be expected, landlords with a large portfolio had more significant amounts owed to them by their tenants. This said, landlords with just one property, including so-called accidental landlords, are also struggling with 16% making a loss.
David Salusbury, Chairman of the NLA, said: “It’s a sign of the difficult economic conditions that so many landlords are experiencing rental arrears.”
Salusbury believes that as a result, “landlords should work with their tenants to minimise the impact of financial stress,” and “it is in landlords’ best interests to help tenants through tough financial times.”
Mr Salusbury believes that landlords and tenants should work closely to try and alleviate the risk of rent arrears. He said: “Landlords who work collaboratively with their tenants towards sustaining the tenancy for the long term will encourage prosperous tenancies.”
Moreover, Salusbury states it will be “professional and collaborative working that will help ensure the private rental market remains a promising investment opportunity.”
This in turn, Salusbury believes, will “bring the economy back to an upward trend.”
The NLA has offered the following guidelines for landlords who have or who are worrying about experiencing rent arrears:
Landlords and Tenants Should Work to Cut Rent Arrears
If a tenant is having difficulty paying their rent, landlords should firstly be sympathetic and offer to talk to them to find a possible solution. It is always better to work together to try and maintain a long tenancy.
When meeting tenants, a landlord should always be transparent and approachable.
At the beginning of the tenancy, setting up a payment plan will benefit both parties hugely in the case of any difficulties. Landlords can offer short-term solutions or amendments to the plan to ease the tenants’ fears.
- Be alert to changes in circumstances
If a tenant suffers a change in their circumstances, a good landlord will discuss rent payments with them in order to establish if they can still hit deadlines. In addition, landlords should inform tenants of any benefits that they have become entitled to and may not be aware of.
- Conduct background checks
Landlords should always conduct adequate background checks on potential tenants in order to make sure that they are in a position to comply with their rental agreement.