The number of landlords and agents seeking vacant possession through the courts is at its highest level since 2009 and up 12.7% from last year.
The government’s latest court statistics show that there has been almost a 25% rise in landlord claims since 2010, with 126,351 possession claims made in the first three quarters of this year, compared with 101,415 in the first three quarters of 2010.
In a recent survey for BBC Panorama, 31% of people paying a mortgage or rent spend more than a third of their disposable income each month doing so. The rent that tenants pay should be no more than 40% of gross earnings under the recognised thresholds that tenant referencing companies use.
One tenant reference and specialist insurance provider, LetRisks, says landlords and letting agents should be aware of these limits when screening potential tenants, since it is easier to avoid arrears than it is to recover them.
Michael Portman, managing director of LetRisks said: “We have seen a sharp rise in demand for rent guarantee insurance as landlords and agents look to find ways to protect their rental income. It is clear that this problem is not going to go away. Across Britain, rents have typically increased by 1.2% over the last year and they look like they will continue to rise in 2014. Some tenants will continue to find it hard to find the rent each month, with the latest figures from the Office for National Statistics showing that a third of working men are in part-time employment, because they cannot find a full-time job, compared to 13% of women.
“The message to landlords and agents is make sure that they consider the strength of the tenant when letting the property by taking out full references, and to consider specific insurance through a specialist company for loss of rent, if the tenant defaults and the cost of legal expenses to obtain possession.”
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