When tenants don't pay rent, it can be a stressful time for both letting agents and landlords.
Agents need to keep their landlords happy to retain business, while many landlords will rely on rent to meet their monthly buy-to-let mortgage repayments.
Of course, the majority of tenants pay their rent on time, but there will always be some who don't and a change in circumstances could mean even the most reliable of renters is unable to pay their rent.
That's why there are products and solutions available which provide agents and landlords with the cover and peace of mind they require should a tenant fall into arrears.
What is Rent Protection?
Rent Protection provides cover for rental payments in the event that tenants don’t pay rent. This means you can continue to pay the landlord the rent they’re owed without having to cover the costs yourself.
Most Rent Protection products also offer cover when a property is vacant for legal expenses and expert legal advice when it’s required.
These days, some providers will also allow you to tie up Rent Protection with Tenant Referencing to give you a comprehensive level of cover, protecting you and your landlords in the event a tenant’s circumstances change or they breach their tenancy agreement.
It’s time to adapt to a changing market
The latest English Housing Survey (EHS) offers a timely reminder of the extent of growth in the Private Rental Sector (PRS). The figures show that the PRS now accounts for 20% of all households (4.7 million) in England, more than doubling in size since 2002, while private renting is now the most prevalent housing tenure in London. This means there is more money at stake each month for agents and that's why being covered is so important.
What's more, the EHS also shows the broad nature of the PRS as a range of demographics make up the tenant population. For example, over a third of private renters (38%) have dependent children and 46% of those aged 25-34 live in the PRS. A greater variety of tenants means more circumstances for agents and landlords to consider and more circumstances which could potentially change. This again highlights the importance of being covered for rental income and legal costs.
You should also consider the impact of the incoming ban on up-front fees charged to tenants, which is due to be introduced in 2019. For the majority of firms, the ban will affect income so you need to be suitably prepared. Offering products like Rent Protection to your landlords could help to replace some of the revenue lost by the fees ban.
As the market continues to change and the sector is covered by more regulation, it’s the agencies which diversify and adapt who will be the most successful.
How can we help?
Here at HomeLet, we provide a range of products and services specifically designed for letting agents. Interested in finding out more? Call our friendly team on 0330 333 7251 for further information.