Landlords Be Aware That Tenant Arrears Are Rising
Landlords have enough to worry about without hearing more concerning news. However, it is important that Landlords are aware of the dangers and pitfalls in their industry and information taken from Your Move’s England and Wales Rental Tracker suggests that Landlords should be aware of a growing number of tenants in arrears.
It is likely that many Landlords across the country will have first hand experience of this situation, but the statistics suggest that the number of tenants who are in arrears increased for the fourth month in a row, by April of 2018. The figures for the proportion of tenants in arrears for 2018 so far are:
- January 2018: 8.4%
- February 2018: 8.6%
- March 2018: 9.1%
- April 2018: 9.4%
These figures are concerning but any Landlord looking for some comfort will take note from the fact that these are far from the worst returns in this area. The worst returns with respect to tenants being in arrears for rent are 14.6% which happened in February of 2010 and 13.7%, which occurred in July of 2017.
Landlords face a challenging time with respect to rent arrears
Landlords should be aware that these are challenging times for many people and a lot of tenants are struggling with rental payments. If possible, Landlords should look to manage their finances as best as they can to create some leeway in case their tenants suffer from problems. Of course, this is often easier said than achieved but if a Landlord is aware of problems, they will at least be prepared to deal with issues as opposed to only finding out at a critical point.
In this regard, communication is vital. A lot of people prefer to avoid talking about money if they can but for a Landlord, a failure to communicate about finances usually leads to problems. Conversing with tenants about rent and their ability to pay as early as possible can minimise the difficulties faced by Landlords in dealing with rent arrears.
Be aware of changes in average rental yields
Another issue highlighted in the recent study is that only one area experienced an increase in average yields. The East Midlands saw the figures from March to April increase from 4% to 4.3%. A fall in average yields poses a problem for Landlords but it is essential that Landlords know that they can achieve better results than the average.
It is fair to say that this is a challenging period for Landlords, but given the demand for rental accommodation, there are still opportunities for Landlords to achieve success. Knowing who your local audience is and vetting prospective tenants is a crucial factor in being a good Landlord and this is often the starting point to making money and providing a worthwhile service to tenants.
If you are a Landlord in the North East concerned about rental fees or you need assistance in running your operations, come and speak with Villabela. We are local rental market specialists and we have helped many Landlords achieve success, so get in touch as we look forward to assisting you.
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