According to recent reports many tenants in the UK are struggling with their rental payments as a result of high debt levels and other financial commitments. The number of tenants that are defaulting on their rent payments is said to be increasing, and this comes from the latest research from the Association of Residential Lettings Agents.
In the final quarter of last year around 40 percent of members of ARLA said that they had seen an increase in the number of rental defaults amongst their tenants. This was an increase from 35.9 percent in the third quarter of the year. Officials said that this was the first time this figure had increased in the space of eighteen months, which showed that a combination of high debts, financial commitments, and job losses were all taking their toll on tenants.
One official said that unlike homeowners tenants were not at risk of being repossessed, although they did run the risk of being evicted if they continued to default on payments. This meant that in some cases they would pay their credit card provider or other creditors before they paid their rent, depending on who made the most fuss about getting paid as quickly as possible. The lowest increase in tenant defaults was seen in the London area.
One industry expert said: “At the beginning of last year we predicted that the number of tenants having difficulties paying rent would increase and unfortunately, this seems to be the case today. It is a situation which can have serious repercussions throughout the PRS as, without guaranteed rent income, landlords may also have problems paying mortgages. At worst, it may result in a rise in repossessions. While it is difficult for landlords to predict whether current or prospective tenants will hit financial difficulties, our research highlights the importance for landlords or agents to implement a thorough selection process and to conduct reference checks on potential tenants – and to consider the benefits of rental protection insurance.”
Tags: homeowners, official, repossessions, repercussions, debt, repossessedRelated posts:
Continued increase in Scottish property pricesIncreased number of people face bankruptcyFinancial Experts Offer Credit and Debt AdviceDebt advisory service urges homeowner to seek advice if necessaryFiled under: News
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