Tenants struggle as rental arrears remain high

With the recession and unemployment affecting many, the number of tenants struggling to meet their repayments and falling into rental arrears is worryingly high.

According to ARLA, the Association of Residential Letting Agents, 55% of their members have seen an increase in tenants struggling to meet their rental payments.

No doubt if the unemployment numbers rise this year so too will the number of tenants forced to default on their rent.

If rental arrears grow too much, tenants risk being evicted from their let property. If landlords don’t receive their agreed rent it could mean they are forced to default on their mortgage payments which ultimately could lead to the property being repossessed.

For those struggling with debts, including tenants and landlords, getting debt advice sooner rather than later, is strongly advisable.

Ian Potter, Operations Manager of ARLA, said: “The housing market looks increasingly buoyant with demand for rental properties having risen strongly since October. The problem of rental arrears will therefore persist and potentially grow in seriousness as tenants get caught in a web of debt.”

He added “As the housing market continues to pick up and demand begins to exceed supply, there is likely to be an increase of new landlords and properties in the rental sector.

It is crucial that agents engage in a careful selection process for both tenants and landlords, and ensure the relevant contracts and agreements are in place.”

ARLA believes the Government needs to create uniform legislation to support the improving housing market and protect both consumers and landlords.

One option for Landlords is to consider Rent Guarantee Insurance. With this you are protected against your tenants’ failure to pay rent, giving you peace of mind of knowing your rental income is secured up to agreed to limits.