Landlords Frustration Grows as More and More Tenants Default

Three quarters of buy-to-let landlords are faced with the problem of an increasing number of tenants defaulting when paying rent. According to the National Landlords Association (NLA), as the economic downturn continues, 71% of landlords believe that in the coming year they will face even more rent arrears.

Currently 37% of landlords are suffering from overdue rents and are becoming increasingly concerned that in the next twelve months the situation will worsen.

The Association of Residential Letting Agents said that this situation has arisen at a time when people who are unable to sell their houses in a falling market are trying to let out their units. This has therefore led to a surplus of rented accommodation in the rental market.

This oversupply of rented accommodation has in turn led to a fall in rents in many areas of the country. The expected income for landlords has been reduced by 2.5% during the last three months, ending in November, and in central London rents have fallen by 8.1%.

Landlords really do live in challenging times at the moment. Not only are rents falling in many areas, impacting cashflow, but property prices are also falling too which means that the capital gains they once had are fast diminishing.

Did you know?

One of the easiest ways to keep on top of your property cashflow is to keep an up-to-date profit and loss account. This will quickly highlight any cashflow ‘problem areas’ in your property business. Creating a profit and loss for each property is simple in Landlords Property Manager, our property management software. All you need to do is use one of the many ‘one touch report’ options to get this information.