One of the biggest and most stressful issues landlords face these days can be rent arrears, particularly if the landlord is relying on the rental income to make mortgage payments. Starting a tenancy where you know the rent is definitely going to be covered can alleviate a lot of stress and anxiety.
In today’s fragile economy and with the uncertainty of the effects of Brexit, no one can assume their job is secure and landlords have voiced their concerns to us in this regard. According to Inside Housing, tenants in arrears who do not receive Universal Credit currently sits at 39% with average arrears increasing from £321 to £616.
Tenants are likely to pay their rent on time every month with no issues whilst they are employed, however, if they suddenly become unemployed, they may start to get into arrears. When this happens, the landlord still has a mortgage or other running costs to cover which can in turn leave a landlord in considerable debt. Having a rent guarantee in place ensures the rent continues to be paid, alleviating this issue.
With prices starting from just £12 including VAT per month, our rent guarantee service provides our landlords with excellent value and greater peace of mind. The only criteria for obtaining this product is the tenant and guarantor must pass the referencing process via our referencing agent and the first month’s rent is received.
The key features of our rent guarantee product are:
Two factors to consider when thinking about whether rent guarantee is right for you are:
If you are comfortable with taking the risk a rent guarantee may not be for you, but if the risk and impact are high and you’re uncomfortable with this level of risk, it’s certainly worth considering a rent guarantee policy.
Whilst rent arrears at Howland Jones are consistently below 1% (a statistic which to our knowledge cannot be matched by any other local agent), this remains an unsettled market and the job market is less predictable. Some landlords may have a savings cushion to fall back on and arguably this may a better way of protecting yourself against loss of rental income, but this is not the case for all.
For many, investing less than 2% of the annual rental income in a rent guarantee product buys complete peace of mind. If you would like to know more about this product, please contact me, Allison Lucas, Director of Lettings on 01530 271313.