Don’t be impacted by rising rent arrears

08 February 2024 781 Views

A recent survey by digital mortgage lender, Molo, revealed that nearly 60% of UK landlords have seen a rise in late rental payments, with the average arrears amounting to £723.

It also found that the worry of rent arrears is one of the major concerns for landlords in 2024, with 44% saying it’s a cause for stress.

On average, landlords experience 2.9 late rental payments a year – almost a quarter if calculated on monthly rental payments over a year.

Even Google search term analysis by Zero Deposits found that there was an 81% rise in those searching for ‘rent affordability’. The same analysis found searches for rental properties dropped by 52%, suggesting that tenant mobility dropped.

We are all human and understand that a lot of people are facing financial difficulties, which is why over half of landlords have implemented payment plans.

But when landlord costs have risen dramatically as well, it’s putting financial strain on them too, not to mention the addition time it takes to manage rent arrears and tenant communications.

The knock-on effect  

After more than a year of consecutive interest rate rises, the number of buy to let mortgages in arrears doubled in a 12-month period as leveraged landlords struggled to cope, according to banking trade body, UK Finance.

In some cases, mortgage payments are higher than rent received or totally wipes out any profit after additional costs like management fees, ground rent and maintenance.

The cost of living crisis also caused many tenants to move into shared or more affordable accommodation or back home, adding more pressure to landlords as voids increased. This is only made worse by consistent late or unpaid rent.

Although mortgage rates appear to be settling, any landlord that has had to secure a new deal in the last few months will be feeling the pressure for some time to come.

How can you remove the stress of rent arrears?

Aside from putting a payment plan in place or reducing the rent to an affordable level, there’s not a lot you can do in the current affordability crisis.

You can, of course, serve a Section 21, but the likelihood of recouping lost rent is slim and will only add to the losses incurred. There’s also the moral dilemma of making your tenant homeless, especially when their inability to pay the rent may be outside of their immediate control.

An alternative, particularly if rent arrears are an ongoing concern with the property, is to remove the burden by selling it. But when you are already out of pocket, and if you’re highly leveraged, waiting for the tenant to be evicted prior to sale will only add to the financial loss, and stress.

What if you could get rid of properties in rent arrears without having to serve a Section21, waiting two months (at best), to evict the tenant?

Also removing the need to redecorate and re-let or sell on the open market?  

We’ll buy your rent arrears

If you have a rental property with late paying tenants, then we’ll purchase it from you for cash.

There’s no need to serve a Section 21, as we’ll take the property on with tenants in situ.

You can remove the stress and hassle of any rental property within a completion timeframe to suit you with the added benefit of paying zero agent or legal fees.

Get in touch today for your no obligation cash offer.