Landlord Confidence Dips in February – Exert Some Control

Latest Landlord News by: Madalena Penny

Tenants thinking they can lower the rent as they wish has been cited as one of the reasons landlords gave for feeling less confident in the rental market, according to UPAD’s monthly Confidence Survey.

The prospect of interest rate rises has also sparked concerns as landlords have expressed that rent margins are already too tight.  The monthly index which measures confidence in the residential rental market has reported a slight fall in landlord confidence with a 2% drop from January’s 63%.

Although tenant-demand is showing no visible long-term signs of decline, welfare reform and interest rate rises has obviously attributed to slight misgivings in the private rented sector.

Although landlords may feel they have little control over these factors, there are certain avenues they can take that allow them some command through the direction of tenant-management.  The first step is ensuring the correct tenant.  Landlords who use the services of letting agents should take the time to get to know their agent well and build a good relationship with them.  It’s important that agents understand what you want from a tenant and what your policy is on late payments, arrears etc.  It’s also worthwhile to ask your agent about their tenant referencing methods and which package they use.  There are a few products on the market ranging in price from a basic check to more thorough tenant vetting procedures.

Setting a realistic rent that tenants can achieve, despite increases reported in the sector, will allow you a steady flow and in the long-term less arrears and rental voids on property.  Rent guarantee insurance is another worthy investment and may save you worry and expense if hit with tenant arrears sometime in the future.  If issuing a tenancy to someone on housing benefit, arm yourself with a rent guarantor on his or her behalf.  Again reference checks can be made on guarantors as well as tenants.

UPAD’s CEO, James Davis said:

“More than ever this month, landlord confidence is all about the tenant.  In some areas of the country, we’re seeing rents start to fall.

“As the cuts start to bite, other landlords are experiencing a variety of problems with their tenants.  In some cases, tenants are in arrears; elsewhere, we’re seeing rents start to fall.

“Tenants are rightly reluctant to over-commit themselves, but this does worry landlords, especially those whose rent payments are only just covering their mortgages.  There is ongoing concern about possible interest rate rises, which would be disastrous for many people.

“More than ever now, letting a property isn’t just about finding a tenant and raking in the rent; it’s about finding the right tenant and being as sure as you can be that they’ll look after both your property and your income.”

Sim Sekhon, spokesman for landlord network, ‘Legal 4 Landlords’ confirmed UPAD’s opinion on the sector:
“Landlords can protect themselves from a number of external and economic factors through tenant referencing, rent guarantee and a host of specific insurances.  Although long-term forecasts appear positive, tenants can and unfortunately do run into financial problems that can cause landlords rental loss.”