The Covid-19 pandemic has had a financial impact on a large portion of the population due to enforced business closures, struggling market sectors and redundancies.
Many people who have struggled financially are private residential tenants who may have been unable to pay rent over the course of this year. When tenants fall into arrears, it can be very difficult for landlords to get the money back.
This causes a range of financial issues for landlords, who are likely to have buy-to-let mortgages to pay, portfolio expansion to fund or property refurbishments to make.
Meanwhile, rent arrears also cause serious problems for accidental landlords who have let a property in order to be able to move into another one and are reliant on rental income to pay their mortgage.
In the worst cases of rent arrears, landlords will need to pursue an eviction. Repossessing a property through the courts is often a long and expensive process, issues which have been exacerbated this year due to ongoing government restrictions on evictions in light of the pandemic. For example, landlords seeking possession are now required to provide six months’ notice, except for in the most serious cases of rent arrears, anti-social behaviour, domestic abuse or fraud.
According to the latest figures from HomeLet, the average monthly rent in the South East was £1,053 in October. This means that landlords in Hastings, Bexhill and Eastbourne who have been battling the worst cases of arrears this year could have lost a total of £9,477 in lost rent over the nine months from March to the end of November.
With the pandemic continuing to affect our daily lives and tight restrictions set to continue, East Sussex landlords need to have the adequate protection in place to ensure they don’t come unstuck by rent arrears and lose out on a significant chunk of income each month.
How can landlords protect themselves against rent arrears?
Luckily for landlords whose tenants fall into arrears, there are insurance products available which can protect your income and cover very expensive legal fees.
Some of the best landlord legal expenses and rent guarantee insurance policies provide cover for a range of events up to £100,000. These policies also include rent protection for up to £2,500 per month.
Landlords taking out policies like this will benefit from rent protection, eviction cover, legal expenses cover, protection against repair and renovation disputes, tax cover, attendance expenses and protection against health and safety prosecutions.
Insurance policies like this help to protect landlords against serious rent arrears and a host of other tenancy problems, the likelihood of which occurring has been increased this year due to the pandemic.
Having the right rent guarantee and insurance – which can be easily purchased through a letting agent – helps to maintain a landlord’s cashflow and provide peace of mind that their asset is protected during uncertain times.
If your property is not properly protected, you could lose thousands of pounds in lost rent and then have to spend even more money trying to regain possession of your property.
What should you do if a tenant falls into arrears?
If one of your tenants stops paying rent, strong early communication from the outset can help to ensure the situation is brought under control before it escalates.
By understanding a tenant’s financial situation, you can devise a repayment plan so they can start paying back what they owe in affordable chunks.
When tenants fall into arrears, it involves a lot of chasing and the landlord must be proactive if they want to get things back on track and recoup lost rent.
You need to make sure all payments and communications are recorded in writing in case you need to pursue an eviction in the future.
Carrying out all these processes while continuing to manage a property can be very time-consuming and involves a lot of legwork. That’s why many landlords in East Sussex work with local letting agents who are experienced in these issues and will look after everything for them.
By allowing a local letting agency to manage your property and taking out the necessary insurance, landlords can feel safe in the knowledge that they are protected if serious rent arrears become a problem. Despite many providers withdrawing products due to the pandemic, here at Oakfield Estate Agents we are still able to provide landlords with full cover.
Taking this two-pronged approach to rental property protection means you won’t be liable to lose up to £9,500 in 2021. Instead you can sleep easy and focus on paying your buy-to-let mortgage, refurbishing properties and expanding your portfolio.
For further information on landlord insurance and how to manage rent arrears, please get in touch with us today. You can request a free instant online valuation to see how much your East Sussex property could be generate in rent each month.