Posts with tag: rent payments

SMS is the preferred way for tenant communications, says PayProp

Published On: October 16, 2020 at 8:30 am


Categories: Landlord News,Lettings News

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PayProp is highlighting the handiness of using text messages for tenant rent reminders and chasing late payments, as it can save letting agents time and resources.

They point out that text message communications also meet the needs of modern tenants, many of who prefer not to receive direct phone calls.

Why is SMS an effective communication method?

According to a report from Mobilesquared, over 99% of all text messages are read by the recipient – and approximately 90% are read within three minutes of delivery.

Neil Cobbold, chief sales officer at PayProp, says: “When it comes to chasing rent payments, it’s clear text messaging has become one of the most effective methods of communication.

“Traditionally, agents have used letters and phone calls to remind tenants about outstanding payments. However, letters are very easily ignored, while younger generations are less likely to speak on the phone.

“Even if tenants delete texts, they are highly likely to read them before they do so. Having the information pop up with urgency can encourage them into action.”

He adds that many renters now use mobile banking to pay their rent, either manually or by standing order.

SMS meets the needs of modern renters

Renters have also responded in recent research that SMS is their preferred method of communication. A survey by bill payment company PayPoint found that 57% of tenants were opposed to direct phone calls, with 62% preferring to receive texts instead.

Cobbold says: “It’s important that agents take the preferences of renters into account. If rent is overdue, tenants are more likely to act if the agent reaches out using their preferred method of communication.”

According to PayProp’s recent report on the effects of COVID-19 on the UK lettings sector, 91% of tenants who received an e-mail or text message arrears reminder from the platform in August 2020 paid some or all of their debt within seven days.

Cobbold continues: “A record of text messages can further be kept and used as evidence further down the line if required.

“Of course, in the most serious cases, a phone call or in-person meeting may be needed. However, in the first instance, text messaging is an effective way of sending rent reminders.”

SMS can also save time and increase efficiency

Cobbold concludes: “Automating rent reminders is a simple way for agents to recover rent owed without taking up too much valuable time. If landlords receive a higher proportion of outstanding rent, agents can preserve their management fees – it’s a win-win.

“This approach lets agents focus on more serious cases of arrears or non-payment of rent where text messaging has been ineffective.”

Rent Payments Should be Used as Part of a Tenant’s Credit Score, MPs Say

Published On: October 24, 2017 at 11:17 am


Categories: Property News

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Rent payments should automatically be used as part of a tenant’s credit score to help them secure a mortgage to buy a home of their own, MPs have said.

Rent Payments Should be Used as Part of a Tenant's Credit Score, MPs Say

Rent Payments Should be Used as Part of a Tenant’s Credit Score, MPs Say

MPs took part in a debate yesterday over whether rent payments should be taken into account when private tenants apply for a mortgage to buy their own homes.

The debate took place at Westminster Hall after a petition on the issue, raised by Plymouth construction worker Jamie Pogson, attracted 147,307 signatures, which is significantly more than the 100,000 needed to force a debate in Parliament.

Credit rating agencies do not currently routinely include rent payment history when calculating credit scores. This means that a tenant can find it difficult to access a mortgage, even if they have a long history of rent being paid in full and on time.

However, a recent survey of almost 3,000 buy-to-let landlords carried out by the Residential Landlords Association (RLA) found that 61% of landlords would support rent payments being added to tenants’ credit histories, in the same way that mortgage payments are.

The RLA believes that including rent payments in this way would also make it easier for landlords to make a more accurate assessment of a prospective renter’s credit and rent payment history.

Steve Burrows, the Managing Director of LateRent and Landlord Secure, a company that already offers a free service allowing landlords to report payment history to credit reference agencies, so that tenants who pay on time can build up a good credit history, also believes that rent payments should be included when calculating credit scores, to support renters wanting to buy their own homes.

He says: “It is no secret that owning a property has become a distant prospect for many, and the private rental sector continues to grow as a result. It’s therefore oddly out of step that tenants are unable to utilise rental payments as part of their credit profile – particularly as the Government increasingly seeks to promote homeownership across the UK.

“We know this has been a rising frustration amongst renters for many years, which is why we launched LateRent – a free service which allows landlords to report payment history to credit reference agencies, so tenants who pay on time can build up a good credit history. It has been hugely welcomed by tenants and landlords alike, showing the importance of yesterday’s debate.”

He adds: “Clearly, it’s time for the Government to sit up and listen to this often overlooked market, and stop simply paying lip service to their own housing policies.”

Do you support the outcome of the debate?

Half of Landlords Would Refuse Tenant over Poor Credit Score

Published On: October 10, 2017 at 10:13 am


Categories: Landlord News

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Almost half of landlords (46%) would refuse an application from a new tenant if they had a poor credit score, new research has revealed.

Half of Landlords Would Refuse Tenant over Poor Credit Score

Half of Landlords Would Refuse Tenant over Poor Credit Score

However, credit histories do not currently form part of regular checks for new tenants, despite them giving a better picture of how an applicant has dealt with making payments in the past.

Typically, letting agents rely heavily on publicly available information, such as County Court Judgements (CCJs) or declarations of bankruptcy, which can give some insight into a tenant’s previous financial footprint, but not the full picture of their current situation.

The fact that landlords put so much weight behind a credit score suggests that the market needs to make this check a normal part of the tenant application process.

According to a new industry report from tenant referencing agency Landlord Secure, 48% of landlords would refuse to sign a tenancy agreement with a tenant who had been subject to a CCJ in the past, while 42% would reject an application from a tenant with past insolvency issues.

Applicants with existing debts, like credit cards or loans, would raise red flags for 30% of landlords, while those in receipt of housing benefit wouldn’t be accepted by 19% of landlords. 16% of landlords wouldn’t accept tenants on Universal Credit.

Although rent payment history does not currently form part of a tenant’s credit score, there are increasing calls in the industry for this to become the norm, so that those in rental properties can build a credit score based on regular and timely payments, and have access to the same advantages as those with a mortgage.

The Managing Director of Landlord Secure, Steve Burrows, says: “Those in rental properties are at a serious disadvantage when it comes to building a credit rating, because paying rent on time doesn’t count towards this score.

“Given that landlords would put more weight behind a tenant’s credit score, those in rental properties should be given the chance to build a better credit score based on their history of paying rent on time.”

Landlords Given Power to Report Late Rent and Avoid Problem Tenants

Published On: September 5, 2017 at 9:37 am


Categories: Landlord News

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Landlords have been given the power to access more in-depth credit information about potential tenants and report late rent payments to credit reference agencies, with the help of a new online tool.

Landlords Given Power to Report Late Rent and Avoid Problem Tenants

Landlords Given Power to Report Late Rent and Avoid Problem Tenants

The credit check service, which has been launched by Landlord Secure, will give landlords a far more comprehensive overview of a new applicant tenant’s credit history, by revealing if the applicant is in arrears with loans or credit cards, and even how much of their credit they are using.

Previously, credit reference agencies were only able to provide identity verification, residential history and publicly available information on a tenant, such as County Court Judgments (CCJs) or bankruptcies, rather than giving an insight into their current credit status.

The new tool will allow landlords to view how many active accounts an applicant has and which are being paid on time, the total balance of unsecured accounts in the previous month, and the worst status of any active accounts for a minimum timeframe of three months before an application was made. This will help to assess affordability and mitigate risk.

Landlord Secure has also recently launched another free tool, LateRent, which allows landlords to report payment history to credit reference agencies, enabling them to conduct robust affordability assessments on potential tenants.

The move comes after the Residential Landlords Association (RLA) called for credit reference agencies to include rent payment history, to aid in the calculation of credit worthiness and affordability of renters.

LateRent will report a registered tenant’s monthly payment status, and this will show up on any future credit searches carried out by financial institutions.

The system also allows tenants who pay their rent on time to build up a good credit history, which could assist them with future mortgage or credit applications.

The Managing Director of Landlord Secure, Steve Burrows, says that the new tools will be a benefit to good tenants, while improving the lettings process for landlords: “Chasing late rent payments can be an all too familiar issue for landlords to find themselves in. Tenant vetting checks and referencing services are meant to help them avoid these problems, but most are not comprehensive enough and the information they gather doesn’t present an accurate picture of an applicant’s current credit status.

“This new credit check service, coupled with the LateRent platform, will make it much easier for landlords to select the appropriate tenant. It will also enable tenants who pay their rent on time to build up a better credit history, which may help later if they apply for other credit or financial products.”

Landlords, remember that the best way to protect your pocket against tenant rent arrears is with Rent Guarantee Insurance:


Letting Agent Gets 10 Year Ban for Missing £578,000

Published On: June 30, 2015 at 1:29 pm


Categories: Landlord News

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A letting agent has been disqualified from acting as a company director for ten years after his agency in Hove collapsed.

Letting Agent Gets 10 Year Ban for Missing £578,000

Letting Agent Gets 10 Year Ban for Missing £578,000

There is a known sum of £577,865 missing in tenancy deposits and rent payments.

Peter Leonard, 58, has been banned for “failing to make sure that tenant deposits and rent payments collected in by the company were properly protected.”1

The firm, Direct Residential Lettings, owes the sum, calculated by The Insolvency Service.

A spokesperson for The Insolvency Service says: “The public should be assured that The Insolvency Service will seek to disqualify the directors of companies that do not obey the law and use other people’s money for the benefit of the company.”1

Leonard was the director of the agency until its sudden closure in May 2013. He will be prohibited from becoming involved in the promotion, formation or management of a company until 2025.

The Insolvency Service cannot account for transactions paid out of Direct Residential Lettings’ bank account totalling £501,393 between October 2012 and May 2013.

The Service says that Leonard did not safeguard tenant deposits and rent payments from as far back as April 2007. He is also guilty of misleading the National Approved Letting Scheme (NALS) by submitting false accounts from 2010 onwards.

Leonard was put under police bail on suspicion of fraud in June 2013 following the firm’s collapse. He was released from bail in March 2014 and Sussex Police confirmed that there would be no further action taken against him at that time.

A winding-up order was made against the company in September 2013.