Household debt adds further pressure to the PRS

Household debt adds further pressure to the PRS

2019 looks set for another period of uncertainty for landlords as household debt continues to increase, putting further pressure on disposable incomes and  adding ultimately more risk on potential rent defaults.

Data recently provided by UK Finance indicates that £11.3bn of credit card spending increased annually by 7.5. percent in November 2018 from the previous year, with outstanding payments increasing by 5.3 percent. Simultaneously, personal borrowing, which includes loans and overdraft usage increased by 2.5 per cent in same period.

So what does this mean for landlords? Well put simply, households are increasingly reliant on debt to finance their spending, which really brings into focus the way landlords should be using companies like Tenant Referencing UK for their referencing.

Furthermore, this should also serve to reinforce that the risk factors are going to remain for quite some time until the issue has been resolved, which will not happen overnight and would require a meteoric shift in the structure of the UK economy. 

Fear not, however, the fundamentals of being a modern day landlord has not changed, but rather reinforces what every landlord should be doing regardless in order to maximise their exposure and to protect themselves and that’s by:

1)      Ensuring landlords are aware of  the changing dynamics of the rental market and knowing what constitutes a good referencing services, which we, of course, offer and now at no cost to the landlord for our charge the tenant full referencing service.

2)      Recognising the importance of rent guarantee policies that will help to cover the cost if the tenant stops paying.

If landlords follow these basic protective measures, then this will serve to aid them in ensuring that they have the means to cope with the increasing risk going into 2019.

Author: News @ Tenant Referencing

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