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Happy Holidays for Landlords - not Humbugs!
Ah yes, Christmas – that magical time of year when those of us who are apart from their families get wistful and homesick, and those who are actually with their families remind themselves why we do this only once a year….
Maybe you’re watching some Christmas movies classics (I recommend “Elf” with Will Ferrell particularly), and being reminded of the “true” meaning of Christmas – love, friendship, redemption and possibly even some religion. So why do the movies lay it on so thick? Because we all know that Christmas is one of the most stressful times of year if money is tight. The pressure to spend heavily on gifts weighs heavily upon us all, driven by marketing machines honed to scalpel-like precision, especially now Google and Facebook know everything you’ve ever talked about or looked at buying online… And that’s not even counting all the mandatory Christmas drinks/meals/parties you will be ‘forced’ into. So it should be no surprise that tenants feel the squeeze, and rent arrears go up in December and January, regular as clockwork.
Rent arrear statistics:
In December 2015, debt advice charity the Money Advice Trust warned that rent arrears is the fastest-growing problem it is seeing. The charity previously received 20,000 calls between January 2015 and October 2015 from tenants behind with their rent. In 2008, the figure was 8,000.
It has been estimated that in excess of 2.2% of tenants are currently in arrears with rent payments.
Despite these statistics, according to The National Landlords Association, 9 out of every 10 landlords make no allowance for non-payment of rent.
The cost of arrears to a landlord:
Costs associated with this issue can be significant. A tenant needs to be 2 months in arrears before proceedings may even be started. Legal fees, court-costs, bailiff fees and lost rent can easily amount to the equivalent of 6 months rent. With all the other financial pressures currently being exerted on private landlords, it can take a number of years for an investment to fully recover from a blow of this magnitude.
So what does the Christmas Landlord Elf recommend?
None of us want to feel like Scrooge at Christmas, but the reality for many landlords is that they will themselves fall into mortgage arrears very quickly if the rent does not arrive on time. After all, you’ve been buying all the same presents and going to the same parties, and you’re probably feeling a bit light (and merry) yourselves! So planning ahead to allow for these arrears can be crucial.
How Belvoir can protect you:
Belvoir, in partnership with specialist insurance provider, Let Alliance, has designed a solution specifically for our landlords, which offers comprehensive peace of mind:
The Belvoir Rent Guarantee Service includes:
1.Nil excess with rent paid from the point of first arrears.
2.Legal costs to obtain possession of the property if the tenant fails to pay the rent.
3.Full rent protection, for up to 4 tenants.
4.Total claims up to £50,000.
5.Breaches of the tenancy agreement by the tenant, in respect of non-payment of rent and expired section 21 notices.
6.Court attendance where required.
7.Continuous cover even when the tenants change.
This is just like any insurance – you make a small payment now, to guard against expensive risks later. Whether you feel that it is right for your circumstances is a personal thing, and we would be happy to discuss your individual needs anytime. As ever, you can contact Jasmine, Matt or myself to discuss your property questions on 0115 945 5179, or by emailing firstname.lastname@example.org
Most importantly, remember that Christmas really is there for enjoying with your family, despite my fake-humbug attitude! So go watch Elf, with some mince-pies and a paper hat. You’ll feel better for it!