Benefit Cuts To Hit Landlords As More Than 50% Report Rent Arrears

[cashinmattress]

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More than half of landlords have experienced late rent payments in the past year, with housing benefit cuts expected to put further pressure on tenants, a survey has found.

Research by the National Landlords Association has found 52 per cent of landlords have reported rent arrears in the past 12 months.

The survey of nearly 600 landlords found the average late paying tenant owed £730 in late rental payments.

The research also found 62 per cent of landlords believe running a lettings business is becoming more difficult.

David Salusbury, Chairman, National Landlords Association, said: “It is concerning that more than half of landlords have received late rent payments or no rent at all in the past year. The government cuts to housing benefits will only put further pressure on tenants who are struggling to pay the rent on time.

“Landlords are unable to absorb this cost of rent arrears long term as they have their own financial commitments such as mortgage repayments, which could increase further with the predicted rise in interest rates.

“Well over half of landlords also believe running a lettings business has become harder recently. These landlords should consider joining an organisation like the National Landlords Association, which offers advice and support to help them run their lettings business.”

Landlords can also take out NLA Rent Guarantee Insurance which covers up to £2,500 per month for unpaid rental income (up to a maximum £15,000 or six months rent).

Such is life when the government lets private citizens take over the role of housing the nations trash.

Soon they won't be there to support you. How is this not predictable?

But what about all the headlines claiming that rents are 'soaring' etc...

There is so much bullsh1t in the media, its hard for anyone to make an informed judgement; akin to a financial fog of war perpetrated by the nations failed banking sector.

But, its pretty safe to say that BTL is going to lose you money from now on, unless you can buy in cash and can afford to risk what could potentially be a rocky decade or much more.

As Beeny says, most BTL will find that they made more money doing absolutely nothing.

Edited May 24, 2011 by cashinmattress

[OnlyMe]

Onl som much boold you can squeezse out of a stone - food/fuel for the car to get to work or rent? Simple priorities there.

[Georgia O'Keeffe]

Onl som much boold you can squeezse out of a stone - food/fuel for the car to get to work or rent? Simple priorities there.

absolutely harrowing news, the wife asked why i was crying after reading this article

[Mrs Bear]

link

Such is life when the government lets private citizens take over the role of housing the nations trash.

Soon they won't be there to support you. How is this not predictable?

But what about all the headlines claiming that rents are 'soaring' etc...

There is so much bullsh1t in the media, its hard for anyone to make an informed judgement; akin to a financial fog of war perpetrated by the nations failed banking sector.

But, its pretty safe to say that BTL is going to lose you money from now on, unless you can buy in cash and can afford to risk what could potentially be a rocky decade or much more.

As Beeny says, most BTL will find that they made more money doing absolutely nothing.

I like the way they say LLs are unable to absorb rent increases, because of mortgage etc. commitments.

Some will be. Others will have bought the properties well before prices shot up - in some cases way before. Some will be getting relatively very high yields on which they could easily afford a drop in rent.

Better to bleat about poor hard-done by LLs though, nobly providing a vital social service.

[Si1]

this is clearly nonsense as landlords will not allow rents to fall, and will simply get private tennants to pay the same rents instead

furthermore, since they will refuse to sell their houses at a loss, they will additionally not permit selling prices to fall

(a primary school teacher with a BTL told me this)

[GordonBrownSpentMyFuture]

[Georgia O'Keeffe]

cried when I heard the news,then it made me think of all the btlers I know and then I jsut cried even more.heartbreaking news for Waitrose workers.

its not often i get emotional and i abhor empty rhetoric so when i say its a disaster of absolutely biblical proportions i think you can sense the gravity of the situation

Edited May 24, 2011 by georgia o'keeffe

[bomberbrown]

I'm playing this!

[The Knimbies who say No]

this is clearly nonsense as landlords will not allow rents to fall, and will simply get private tennants to pay the same rents instead

furthermore, since they will refuse to sell their houses at a loss, they will additionally not permit selling prices to fall

(a primary school teacher with a BTL told me this)

Yikes!

[thecrashingisles]

this is clearly nonsense as landlords will not allow rents to fall, and will simply get private tennants to pay the same rents instead

furthermore, since they will refuse to sell their houses at a loss, they will additionally not permit selling prices to fall

(a primary school teacher with a BTL told me this)

Where does she teach? That's the sort of 'can do' attitude I want my kids to learn!

[VeryMeanReversion]

I had to deal with a non-paying tenant when I was executor for a probate sale. The legal process to remove them had already taken more than 6 months before the tenant left voluntarily (after pocketing the housing benefit, not passing it to the landlord).

That pretty much cost a years rent. Being a landlord is risky business, the AST process doesn't really protect them from a determined non-payer.

[The Knimbies who say No]

I had to deal with a non-paying tenant when I was executor for a probate sale. The legal process to remove them had already taken more than 6 months before the tenant left voluntarily (after pocketing the housing benefit, not passing it to the landlord).

That pretty much cost a years rent. Being a landlord is risky business, the AST process doesn't really protect them from a determined non-payer.

The current system seems to favour miscreants, whether they be landlords or tenants. There's simply no way HB should be paid as cash it's lunacy. The whole system is rotten and could be made a lot better.

[GordonBrownSpentMyFuture]

As Beeny says, most BTL will find that they made more money doing absolutely nothing.

Haha. Really? Did she really? Haha. She'll be proven right too. 25 years of strife for absolutely no financial gain and possibly even a substantial loss too. 5 years of bubble-nomics and everyone thought they were investment gurus. Bloody hilarious.

[Si1]

Haha. Really? Did she really? Haha. She'll be proven right too. 25 years of strife for absolutely no financial gain and possibly even a substantial loss too. 5 years of bubble-nomics and everyone thought they were investment gurus. Bloody hilarious.

post of the f*cking decade mate

[exiges]

Some will be. Others will have bought the properties well before prices shot up - in some cases way before. Some will be getting relatively very high yields on which they could easily afford a drop in rent.

Heck even those who bought in 2007 will have been enjoying near ZIRP in the last 3yrs and should have been able to make big overpayments until now. Bear in mind, those feckless landlords bought while the BoE rate was 5% not 0.5%..

[Si1]

Heck even those who bought in 2007 will have been enjoying near ZIRP in the last 3yrs and should have been able to make big overpayments until now. Bear in mind, those feckless landlords bought while the BoE rate was 5% not 0.5%..

that was a teaser to keep the cost of the housing bubble in private hands

it was a big gaping exit point for those smart enough to see it, in particular for recent landlords who paid way over the odds

for those who missed it and needed it, they will pay the price over forthcoming years

[cashinmattress]

Heck even those who bought in 2007 will have been enjoying near ZIRP in the last 3yrs and should have been able to make big overpayments until now. Bear in mind, those feckless landlords bought while the BoE rate was 5% not 0.5%..

I bet that isn't the case for a lot of BTL punters, because of these kinds of things:

[porca misèria]

National Landlords Association

A self-selecting sample that I'd expect to exclude unplannedlords and many other small-scale BTL owners.

If the sample was landlords with 100 properties apiece then it would indeed be surprising if only half of them had any kind of rent arrears somewhere within that portfolio. But you didn't tell us anything about portfolio size.

[pathfinder]

Forget the landlords, 50% of people who are renting are behind by 1 month's in rent. That is far more shocking to me, when you think the thumb screws have just started to turn. It suggests that people are one pay check behind each month, let alone any debt they have incurred!

The apple cart lost one wheel, now it is about to burst into flames.

[Si1]

Forget the landlords, 50% of people who are renting are behind by 1 month's in rent. That is far more shocking to me, when you think the thumb screws have just started to turn. It suggests that people are one pay check behind each month, let alone any debt they have incurred!

The apple cart lost one wheel, now it is about to burst into flames.

tennants are less likely to worry about arears the same way mortgagees are, as it isn't their debt

[leicestersq]

Forget the landlords, 50% of people who are renting are behind by 1 month's in rent. That is far more shocking to me, when you think the thumb screws have just started to turn. It suggests that people are one pay check behind each month, let alone any debt they have incurred!

The apple cart lost one wheel, now it is about to burst into flames.

I think it was 50% of landlords had experienced problems collecting. Given that many will own multiple properties, the actual number of renters behind as a percentage will be a lot less than 50%.

As for the courts, if they make it difficult to evict tenants, then the only landlords that will survive wont use the courts.

[GordonBrownSpentMyFuture]

post of the f*cking decade mate

Thank you sir but you flatter me. THIS is the post of the f*cking decade...

HPC's fofp: "Credit Bubble Bursts: First Snows Of K-winter"

Essential reading for all newbies from 16 August 2007.

[@contradevian]

The current system seems to favour miscreants, whether they be landlords or tenants. There's simply no way HB should be paid as cash it's lunacy. The whole system is rotten and could be made a lot better.

Normally I'd agree with you, but if the rent is being paid its none of the landlords business as to where the money comes from. The idea was to make tenants responsible for managing their money.

Bear in mind that to rent a properly you have to normally go through a credit check process. So imagine a scenario where you have been employed, get made redundant, and claim housing benefit benefit for a few months before getting another job. The rigmorole of the landlord getting payments from the council rather than from the tenant would no doubt cause an issue next time the contract is renewed.

I agree.There should be some legal responsibilty for the tenant to actually pay the rent out of housing benefit rather than just pocket it. I don't know why this could not be regarded as fraud.

[Si1]

Thank you sir but you flatter me. THIS is the post of the f*cking decade...

HPC's fofp: "Credit Bubble Bursts: First Snows Of K-winter"

Essential reading for all newbies from 16 August 2007.

that was last f*cking decade

[MRMX9]

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But what about all the headlines claiming that rents are 'soaring' etc...

There is so much bullsh1t in the media, its hard for anyone to make an informed judgement; akin to a financial fog of war perpetrated by the nations failed banking sector.

Totally agree about the BS. There was an article in the Standard yesterday saying London rents are poised to break through the £1,000 a month barrier.

It then featured a piece about a couple - one of whom was a student - who were struggling to find a cheap place to rent in Wimbledon, Putney or Battersea.

Wouldn't of course be possible for them to leave in a cheaper part of London - would it.

But that seems to be very much the focus of property ramping these days - and if you don't live in an SW or an N postcode in London you basically don't exist. When will the Standard realise that the vast majority of its readers actually live the sort of dumpy suburbs they despise like Croydon, Romford, Sutton and Uxbridge - where you can rent the average 1 or 2 bed for less than £1k a month!