Is your letting agent financially secure?

Has your letting agent invested in new build properties over recent years? Many of these investments are now toxic and are likely to be in negative equity. It is very likely that they will be exposed to higher interest charges as fixed term loans end and they are unable to re-mortgage or sell.


Example: 85% loan secured on an apartment in 2006 or 2007 of £150k using a discount mortgage is likely to have cost the landlord £500 per month in mortgage interest. If the landlord is unable to re-mortgage or unable to sell owing to a large drop in the value then the landlord will have to pay the lenders current variable rate, which is likely to be in the region of £925 per month. Lots more than the rent the tenants will be paying!


We know life is full of risks………. but are you taking the risk to far trusting your agents word that the rent your tenants where due to pay is genuinely late. We all know the world economy has been and is going through major change and some businesses will fail and some individuals will fail becoming insolvent or bankrupt.


Whilst the majority of agents are professional, honest and run profitable businesses there are some that are less professional and not profitable. The effects of dealing with one of these agents should they go out of business will be painful. It will be a stressful experience for the tenant. They will want to know where their deposit is; what has happened to the rent they have paid to the agent (the rent you the landlord have not received!).


The landlords experience will be more than stressful it will also result in lost monies. These monies may run into thousands of pounds. It maybe recoverable from the agent if they have assets and you can find them or if they are a member of one of the trade bodies that requires the agent to insure all client monies. Most professional agents are members of such schemes and as such should not represent a risk to their clients.


Thanks to the continued increase in demand for the private rented sector there are many new letting agents. Many of these agents are not members of any schemes and offer their clients no protection. In fact they are the businesses at higher risk of failure. Caution should be applied to agents who are not members of Safeagent, the NAEA or ARLA.


Landlords are liable to their tenant for any deposit held by their agent and any rent collected by the agent not passed on to the landlord. So if your agent is not a member of one of these trade regulatory schemes and they tell you the rent is late month after month perhaps it is time you visited the agent and ask to check their financial records.


Belvoir Lettings Agency Peterborough & Belvoir Lettings Agency Corby offers landlords a rent insurance scheme with legal expense cover for less than £100 per year for each property. The industry comparable is 4% of the annual rent. So with average rents over £550 per month the saving Belvoir offer is around £200 per year.


Belvoir Lettings Peterborough & Corby are members of regulatory trade bodies and as such their client account is bonded for the protection of their landlords and tenants.


If you have any questions please feel free to call Belvoir Lettings Peterborough & Corby  01733 321500 or 01536 267755 for free advice. Alternatively email