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The cost of evicting a rogue tenant ‘can be crippling’

Evicting an unscrupulous tenant could potentially cost landlords thousands, even hundreds of thousands of pounds, new research shows.

Benham and Reeves has looked at the detrimental financial impact a rogue tenant can have on a landlord's buy-to-let investment based on lost rent, the cost of refitting a kitchen and bathroom, redecorating and replacing the windows, the potential legal fees, as well as the additional cost of mortgage payments out of their own pocket while no rent is coming in.

The independent letting and sales agent says that it takes about nine months in total to evict a rogue tenant from the moment they enter the property to legally removing them. On average across the UK, that is £6,111 of rent down the drain.

However, it goes far beyond the rental costs and the vast majority of the time the property requires a complete renovation as rogue tenants often make off with everything they can or leave what they cannot take in a state of no repair.

Research shows that the two rooms that almost always see the most damage are the bathroom and kitchen and when you add the average cost of a new kitchen (£8,000), the average cost of refitting a bathroom (£4,875), the cost of redecorating (£2,900), new windows (£7,000), as well as the average legal fees of £3,000 required during the eviction process, you are already looking at an enormous bill. 

Couple this with the nine months of mortgage payments that you have to make out of your own pocket due to no rental income (£8,412) and the total bill comes to an eye-watering £40,298 – that is 18% off your properties value wiped off in one hit.

The cost of evicting a rogue tenant ‘can be crippling’

However, in London where property costs are much higher, this total cost climbs to £58,091 for the average landlord in the capital - 13% of the average property value.

Kensington and Chelsea in prime central London is the most expensive area in the UK to rent or buy and having to deal with a rogue tenant for nine months will set you back £100,512, 8% of the average property value.

In Westminster, also in prime London, the cost hits £86,885 with Camden, the City of London, Hammersmith and Fulham, Richmond, Islington, Hackney, Wandsworth, and Haringey all seeing the cost exceed £60,000.

The lower cost of property in Barking and Dagenham means that while the bill is the lowest at £47,394, it accounts for the highest amount of property value wiped off at 16%.

Outside of London, landlords in Oxford and Cambridge are also facing a cost of more than £50,000 to evict a rogue tenant, a loss in property values of 13% and 12% respectively.

In Edinburgh, Bournemouth, Portsmouth, Southampton, Cardiff and Manchester, landlords are still facing a bill upward of £40,000, with landlords in every other major city looking at a minimum cost of £35,000 or more.

Landlords in Glasgow, Belfast, and Derry would see the largest percentage of property value lost at 29% of the average property price.

Marc von Grundherr, director of Benham and Reeves, said: “Rogue tenants are a landlord’s absolute worst nightmare and apart from the stress and time consumed dealing with them, the financial impact can be crippling.

“We’re not talking about a bad apple that doesn’t pay rent for the last two months of a tenancy and leaves a dirty protest on their way out. We’re talking about serious criminal organisations that know the letter of the law and every trick in the book to prevent you from getting rid of them, including how to stall the court date for weeks on end and how to deter the bailiff through threats of violence when they finally do call.

“At the very least, you’ll have a dangerously overcrowded sub-let on your hands but more often than not it will be a brothel, workhouse or drug farm. We’re not kidding when we talk about the complete renovation and refurbishment of the property afterwards either, as they will take every single thing they can and destroy whatever is left.

“Kitchens, bathrooms, and windows are often the main features targeted as they know that these are the most costly areas of a property to replace and more often than not they will smash appliances to pieces, disconnect pipping and shatter windows for no other reason than to cause the maximum amount of damage they can. 

“It’s an extremely deep-rooted issue that goes beyond the tenant, even as far as the bribery of the concierge and so you really are fighting from day one to get them out.

“That’s why we can’t stress enough how vital it is to rent via an agent who conducts the proper checks through a qualified third party who is trained to spot even the most convincing of forged documents. Failing to do so can cost you thousands, even hundreds of thousands to put right.” 

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    This is why now more so than before it is so important to be very careful who we rent to

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    • S S
    • 15 August 2019 09:43 AM

    The cost of a good, trustworthy, qualified LA is worth every penny when the downside can be so crippling yet some LL don't appreciate what a LA can do. Fees are squeezed and for many LL the savings made in the short term are lost when things go wrong. There are always the rogue tenants but using a good LA may help reduce the probability of renting to one. There is a lot of bad media around LA, but without them, the PRS will be in even more serious trouble Recognition of the good independents and the worthwhile job they do is so needed.

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    I'm sorry but I have had more issues with tenants introduced by LA's than with tenants that I have interviewed and spoken with their property-owning guarantors. The only solution is to jail rogue tenants for theft ( of rent ) and any criminal damage. I accept people can get into unexpected financial difficulties but if they refuse to leave once two months in arrears with no means or intention of paying future rental payments then that is theft - deliberately and permanently depriving the landlord of rent legally due. Shelter and Councils are also implicated in assisting an offender by advising rent defaulters to stay put until forcibly evicted.

     
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    There are good agents and there are bad, I have a good one here in Norwich, small independent and trust worthy, I haven't had a bad tenant from them yet, It's the big national letting agents where most problems come from they employ young wet behind the ears boys and girls who haven't got a clue when it comes to the real world.

     
    Paul Barrett

    Absolute twaddle.
    The last thing a LL should do is trust LA!!
    LL should carry out their own rigorous vetting of tenant applicants.
    I can do a fat better job than any LA.
    I do so because if I don't I could end up with a dud LA tenant.
    It is perfectly possible to reference a tenant for about £4O and to achieve RGI if the tenant qualifies.
    Some LL even more rigorous than me adopt an excellent strategy if meeting tenant applicants in their current residence.
    LA are the last people to trust.
    They simply have no 'skin in the game'
    So it matters not to them that a cheap reference produced a dud tenant for a LL.
    If as a LL you aren't capable of knowing how to achieve best referencing then you shouldn't bother being a LL!

     
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    Yes I have to agree. they will throw anyone in to get a fee. I had 2 bad experiences having been introduced to brothels by a LA. not going back there. I let everything myself now and I live overseas!! I have been letting since the 90's and now no problems. There are plenty of good tenants out there provided they are given something they could be proud of

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    Since I started using a LA my profits went up! This was because the tenants that applied had to pay a fee. Hence getting tenants that were taking this seriously knowing they would be wasting their money if they lied on the app. Now that we have no tenant fees every idiot is coming in trying it on. They need to be eliminated from the process quickly.
    I’ve always asked for home owing guarantors and this sorts majority of issues and no rent arrears.
    Nothing like knowing the guarantor is yelling at their tenant relative to pay the rent or else!
    Of course GR and Shelter will focus on this soon and with the help of self serving MP’s will probably be made illegal

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    This is my fear also. I have been taking home-owning guarantors for well over a decade (approaching fifteen years, in fact) and since the first time (2006) I successfully sued a very annoyed guarantor who vowed never to do it again, I said guarantors would eventually be outlawed. In a small, poor town that I operate in, there are not many relatives they can call upon that own a house. Many, many tenants default/trash the place and consequently the guarantor is on-the-hook for it, leaving the tenants without a (wiling) guarantor for the future. In a town where almost all LLs request a guarantor, this locks them out of the PRS market (good!) but the LA don't have anywhere to house them either. Path of least resistance = make guarantors a no-no.

     
  • Paul Barrett

    It is my experience that most people are very bad when it comes to money.
    They might seem a very nice person but when it comes to their life bring affected by their debts they become very nasty.
    For that reason alone I would NEVER be a guarantor to anyone as they turn into nasty people leaving the guarantor to pay the debt.
    When it comes to money it is a fact that the nicest if people turn into feckless cheating wasters.
    As you may have guessed I have experienced Sto say the least significant issues with the outwardly nicest if people who turn into complete a###holes when they realise their lives will be affected by their fecklessness.
    Far better to dump it on some idiot who stood guarantee for you or who assisted you greatly with funds.
    Only a mug becomes a guarantor.
    My now ex-stepmother caused by feckless wasters I lent money to stated something very wise and it equally applies in guarantor situations.
    Only ever lend what you can afford to give away!!!

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    "Never a borrower nor a lender be" (William Shakespeare)

     
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