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With rents still continuing to rise, insurance provider LetRisks is urging to buy to let landlords to ensure they are in a position to cope with rising arrears and evictions.
All figures relating to arrears and evictions appear to be the rise. The number of tenants with two months or more arrears increased by 11,400 in the space of a year according to the latest Tenant Arrears Tracker by Templeton LPA and evictions in the last quarter of 2011 went up 11% compared to the last year too.
The latest research jointly conducted by Rightmove and Savills suggests landlords will have a decision to make in the future whether to continue pushing rents up, even though competition for tenancies will remain high. Charging higher rents will increase the possibility of tenant arrears, while lower rents may be better to guarantee income over a longer period.
Michael Portman, Managing Director of LetRisks comments: “The increasing cost of renting, the continuing economic challenges in the UK and the deteriorating labour market is leading to a rise in rent arrears. The outlook remains potentially bleak, with increased tenant evictions that will affect the ability of landlords to meet their monthly mortgage outgoings.
“The next few months are going to be particularly challenging for landlords who do not have rent and legal expenses insurance, as obtaining a court order for possession and obtaining a money judgment will be expensive and can take a minimum of at least 3 or 4 months. For many landlords, rent insurance is a low cost, effective way of guaranteeing their rental income. It also provides legal assistance and cover for the legal costs incurred in the event of a tenant falling into rent arrears.”
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