Online letting agency Upad is now providing landlords with a new proprietary system to collect rental payments via direct debit.
The agent’s new system, called Rent Manager, is a direct debit controlled rent collection system that will provide landlords with the assurance each month that their tenant’s rent will be paid on time.
James Davis, founder of Upad and himself a portfolio landlord, said: “So many aspects of our lives are already paid via direct debit and it’s staggering that this hasn’t been the norm in the rental market before now. If you pay a utility bill or mobile phone bill late, you get cut off. Missed mortgage payments lead, eventually, to repossession. Yet there is an underlying assumption that being ‘a few days late’ with the rent is acceptable and it’s simply not.
“Over half of all UK landlords have a mortgage on at least part of their property portfolio, whilst it’s likely that all landlords rely on their rental income, to some greater or lesser extent. Therefore, to be left without total certainty that the money will come in each month is something which needs to stop.”
The direct debit system places a hold on the money three days in advance of the payment being made, so the landlord is provided with the assurance of receiving the funds on time.
For the tenant, meanwhile, the risk of overspending as rent day approaches is reduced, plus the paying via direct debit contributes towards an improved credit rating.
Davis added: “The past two years have seen significant changes within the rental market, but now that those are mostly in place, the focus has shifted away from the landlord and we intend to change that.
“Landlords provide a vital role within the UK’s housing market, yet they’re bashed more than they’re protected.
“With NLA figures suggesting that 36% of landlords have experienced rent arrears in the past year, our provision of a direct debit facility is intended to hand some power and assurance back to them.
“It also goes some way to providing them with a more respected, business-like status given their contribution to the UK’s economy – and that’s something we’re committed to championing.”