Absconding tenants on the rise

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by Gill Montia

The Letting Protection Service (LPS), which provides specialist insurance, referencing and protection products for UK landlords, has reported a sharp rise in the number of tenants quitting their properties to avoid paying rent.

Claims for lost rent resulting from absconding tenants increased from 91 in October 2007, to 1,286 a year later.

A director of the firm, Kevin Firth, has a message for both tenants and landlords.

In the case of tenants, he advises that “running away from financial difficulties is never the best way to deal with them” adding that this approach can have a negative impact on a person’s credit rating and could potentially mean they break the law.

For landlords, Mr Firth offers the figures as a “stark warning”, especially for novice landlords.

He also asks them to bear in mind that the rise in claims reflects the experiences of “sensible” landlords, or those who have taken out insurance on their rent, when thousands of buy-to-let investors may have no such cover in place.

LPS is part of the Computershare group and its parent company, which also runs The Deposit Protection Scheme, has provided the statistics.

In related news, recent reports suggest that tenants are sharpening their negotiating skills and driving hard bargains with landlords, as the supply of rental property increase.

Earlier this week, property search engine, Globrix, reported that the number of new rental properties coming onto the market rose from 98,841 in the final three months of 2008 to 155,499 in the first quarter of 2009.