MakeUrMove is warning that a significant number of buy-to-let landlords are thinking about quitting the private rented sector due to problem tenants including those that fail to pay their rent and cause property damage, resulting in a repairs bill that can run into the hundreds if not thousands of pounds.
A new survey commissioned by online letting agent has found that almost half - 47% - of landlords have had issues with tenants who do not pay the rent on time, while around a quarter of landlords have also faced significant bills when tenants have left properties in a state of damage and disrepair.
One landlord surveyed was left with £16,000 worth of damage after a rogue tenant left a property.
The tenancy security deposits that tenants leave with landlords or their letting agents will soon be capped at a maximum of six weeks rent, in accordance with the Tenant Fees Bill introduced into Parliament last week, but many landlords said that damage caused by tenants far outstrips the sum of the deposit usually taken at the start of the tenancy.
Problem tenants is a concern for 37% of the landlords surveyed, while 26% identified tenants breaking items and refusing to pay as a concern, as is extra people living in the property who are not on the tenancy agreement (22%), and tenants refusing to leave at the end of their tenancy (16%).
Alexandra Morris, managing director at MakeUrMove, pointed out that 60% of landlords in this country are ‘accidental’ or ‘casual’ landlords, meaning they only have one property and rent it out to supplement their main working income. However, she believes that stress and financial pressures caused by what she termed “challenging” tenants is a sure fire way to put them off and steer them away from further investment.
Morris said: “Generally, as long the rent is coming in every month to cover mortgages and other associated costs, smaller ‘casual’ landlords don’t often plan for bigger costs caused by damage from tenants or lack of funds due to unpaid rent.
“As a result, when a big outlay comes around, some landlords find themselves in trouble, and there’s very little protection offered from the government against these things.”
He added: “Legislation is currently swinging towards tenants, at the risk of undermining the vital role played by private landlords in the UK housing market.
“Legislation such as the proposed deposit cap could make it even harder for private landlords to deal with challenging tenants, resulting in further pressures on landlords to sell up.
“Whilst landlords selling their properties may appear to offer some short term benefits for buyers, it cannot deal with the systemic problems surrounding the lack of housing supply.
“It will also reduce supply in the rental sector, which will increase demand and likely only increase pressures on the remaining landlords to increase rents.”