71% of landlords expect rent arrears to increase in 2009

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by Lin Freestone

The result of research conducted by the National Landlords Association (NLA) shows that 71% of the landlords questioned in a recent survey expect rent arrears to increase during 2009.

Of the landlords who participated in the survey, only 1% felt that rent arrears would decrease next year, and 28% thought there would be no overall change.

The research also revealed that 67% of landlords have experienced problems with rent arrears in the past, while 37% are having payment difficulties with current tenants. The NLA provides landlords with a tenant referencing service through NLA Tenant Check.

Clearly landlords are concerned about the effect the credit crunch is having on their tenants’ ability to keep up with rental payments.

Landlords need to be able to rely on the steady income received through rent, and some will rely on the rental income to pay a buy-to-let mortgage. The consequences of not receiving rent could be very serious in terms of potential repossession and impact on housing supply.

David Salusbury, chairman of the NLA, has said that landlords need to do all they can to ensure they are regularly receiving rent. Regular communication between both parties is essential to head off major problems.

In the current financial turmoil, it is more important than ever that landlords are able to make an informed decision about the financial worthiness of the tenants they are taking on. David Salusbury reminds landlords that a simple credit or tenant reference check before they make a decision will give them some additional peace of mind that their tenants can be relied upon to meet rent payments.