There's plenty of evidence around that rent arrears are on the increase, but what's more troubling is that we have a feeling that the current economic climate things can only get worse. The National Debtline, a charity dedicated to helping people with money worries, says that enquiries related to rent arrears have rocketed by 84% in the past four years. This certainly tallies with other evidence published recently showing that rent arrears are on the up and up.
As the cost of living rises steadily because of of inflation and higher global commodity prices, this means higher food prices and increasing utility bills. Most people are feeling the pinch.
Managing director of Landlord Assist Graham Kinnear said of the problem: “The economic situation is really impacting now. We are referencing tenants who are wanting to trade to smaller properties as they are no longer able to afford their rent. There are increasing numbers who are being made redundant and increasing numbers who are finding it difficult to meet their rental obligations due to soaring fuel and utility prices”
We don't like dealing in doom and gloom, but with the economic climate likely to worsen, whilst you cannot stop rental arrears, you can at least be ready for them:
Referencing is vital: The best cure is prevention, and making sure you have the right tenant in place is the best protection against arrears. But it's based on past performance and isn't a crystal ball.
Keep communicating: You need yo know if your tenant loses their job or has a change of circumstances, so make sure you have a good enough relationship with them so they tell you. You don't want to be the last to know.
Act quickly and decisively: Know what you will do in the event of arrears. Have a plan, know the law and be ready to act if the rent is late.
Protect yourself: Take out a rent guarantee insurance policy. Rent arrears can have serious ramifications and you could lose your property in the worst case scenario. Insurance can protect you.