Landlords – Don't Put Yourselves at Risk


As the UK sees tenant demand increase, tenant referencing has become an essential and intrinsic necessity employed by landlords and letting agents alike.

Whether you rely on data or just plain common sense, it becomes obvious that when enforced, correct tenant referencing saves time, cost and a heap load of trouble in the long-term.  The press and other media at times are known to paint a rather bleak picture of landlords, focusing on the minority of rogues in the industry that give an unpleasant image to all landlords in general.  As everyone involved in the private rented sector can testify, there are far more bad tenants than troublesome landlords.

One landlord last week in Derbyshire filed for a possession hearing after issuing a notice 8 and 21 after learning that not only did they owe 12 weeks rent but they had also caused significant damage to the property.  After a torrent of abuse from the tenants he was left shaken and worried.  To add insult to injury, he will also have the cost of repairing the damage if he is expecting to re-let the property again.

While most of us become desensitised to events of this nature, for this landlord it has caused him untold stress.  After buying the property last year as way of offering him and his wife a pensionable income for their retirement, not only has he already seen a 10% hike in capital gains tax on his investment, but now has suffered the true cost of letting a property without conducting proper tenant referencing.

As more ‘accidental landlords’ enter the private rented sector without understanding correct procedures to protect their incomes, their investments and their peace of mind, more cases similar to the one above will become evident.  As it stands, there are 3.3 million households in England & Wales supported by the PRS.  Because of poor performance of present property sales, the market is seeing a lot more home-owners putting their houses up for rent as a source to allow them to move to another property of their choice.

Without being aware of the industry’s pros and cons, they leave themselves vulnerable and ultimately cause themselves to become victim to a false economy.  First time landlords should seek the services of a good letting agent or landlord Service and Support Company.  Letting agents will charge an estimate of 10%-15% of the rental income and are invaluable to a first time landlord.  Landlord Support and Service Companies administer just one off charges for tenant referencing, evictions etc and are great value to landlords who don’t want the full service of a letting agent.

Any would-be landlord should understand certain issues.

Firstly, that tenant referencing is a must.

That evictions result in cost, some times up to 4 months loss of rental income.

Costly damages can be caused.

Deposits must be placed in a government deposit scheme, with no guarantee that they will be issued to the landlord should the tenant cause damage to the property,

That LHA payments are paid direct to the tenant and are not always passed onto landlords.

That lenders do not respond to excuses for failure to make payments on BTL mortgages if tenants miss or fail to pay rent.

Madalena Penny