David Salusbury, Chairman of the national landlords association, offers advice about the buy-to-let market
readers’
Q&As
What is making some landlords gloomy about the market at the moment?
The current economic climate is proving uncertain for everyone. Some of the problems facing landlords include difficulty in accessing finance and increased costs, as well as a decrease in the value of their portfolios. While some less experienced landlords may have been priced out of the market some areas are now seeing an increase in competition from homeowners who need to move but cannot sell and are choosing to let their former homes instead.
David Salusbury
“NLA Tenant Check offers two levels of service to landlords. The service is quick and easy.”
Are rent arrears likely to increase?
The economic uncertainty for tenants means that there is possibly a higher risk that the occurrence of rent arrears will rise. In a recent survey 71% of our members said that they were expecting an increase in arrears in 2009. Just 1% thought there would be a decrease while 37% of those surveyed were already having payment difficulties with current tenants.
These aren’t just the same
old problem tenants then?
Any increase in rent arrears is likely to come from tenants who, despite their best intentions, cannot meet the rent payments for reasons beyond their control. They may have lost their job, be working fewer hours, or could have unavoidable increases in expenses, such as fuel bills, to meet. If a tenant is on a low income they may qualify for Local Housing Allowance — landlords might want to recommend that the tenant contact the local authority for more details.
How do I know if prospective tenants will pay the rent?
There is certain basic information that landlords can gather to enable them to assess the risk that a tenant might not pay the rent.
You should find out the name and contact details of the tenant’s employer and how long they have been in employment (and check this with the employer).
If the tenant is not working (they may be a student or on income benefits), you might ask that they provide a guarantor — someone who is working and who is prepared to guarantee to pay the rent if the tenant defaults. Some homelessness organisations and local authorities will act as guarantors for tenants on benefits in certain circumstances.
Can I check tenants out myself or will I need help?
A landlord can find out for themselves the basic level of information described here but there is further information that can enable them to make a decision on whether or not a prospective tenant is a good risk. NLA Tenant Check offers two levels of service to landlords. The basic check, available from £6, informs the landlord of any previous credit problems with the tenant. The full tenant check, available from £10, also gathers references from employers and previous landlords as well as a history of previous property ownership. The service is quick and easy, aiming to respond within 24 to 36 hours. For more details visit www.landlords.org.uk
For further information about the NLA, email info@landlords.org.uk
or visit www.landlords.org.uk
Alternatively, call:
020 7840 8900
or visit www.landlords.org.uk
Alternatively, call:
020 7840 8900
