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New figures released this week highlight the growing concern over rapid increases in household spending over the last 2 years fuelled by extra borrowing, especially across the UK’s private rented sector.
The alarming statistics collated by the Registry Trust reveal that nearly 300,000 debt judgments have been filed against individuals in England and Wales in the first three months of 2017, which equates to a 35% rise compared with the first quarter of 2016; the highest quarterly figure for more than 10 years.
So as anti-poverty charities, the Bank of England and MPs continue to warn about the dangerous levels of high consumer debt, it’s feared that debts could worsen even more this year as rising inflation coupled with slowing wage growth eat into household finances.
As well as notable increases in lending from banks, car leasing companies, credit card firms and shops offering interest free-credit, another study published this month has shockingly exposed that one in three private renters on low wages are being forced to borrow money just to keep up with their monthly rental charges.
The research carried out by housing charity Shelter has found that 800,000 households across the UK are unable to save even £10 a month due to the toxic mix of low wages + the cost of renting, with 1.3m households privately renting struggling to make ends meet after they’d paid for the roof over their head; using credit cards, taking out loans and even asking loved ones and friends for cash just to get by.
Shelter have now called on the new Government to build half a million new affordable homes for rent, stating ‘It just isn’t right that so many hard-working private renters are having to take on desperate or dangerous debts just to keep a roof over their heads.’
Couple this with the fact that 5.5m working adults would not qualify for full housing benefit if they were to lose their job, more than doubling in a decade from around 2m at risk in 2003/04, it stands to reason that an increasing amount of private landlords around the UK are now understanding the importance of obtaining a robust rent guarantee insurance.
Wise PRS landlords are now employing RGI as an effective strategy to reduce these risks.
(As a landlord) If you manage to house a non paying ‘professional’ tenant, before long your bills can be astronomical. Gain an understanding of the possible cost of this by adding up eight months rent minimum (it takes most Landlords at least 2 months to decide to evict), add court fees, bailiffs fees, your time, stress and energy. Don’t forget to add in the out of pocket expenses such as damage to the property, removed boilers, copper piping amongst a whole host of other damage that can be done. Environmental health visits and other activities can also delay the process by at least 12 months.
Having protection against this, in association with LandlordReferencing.co.uk’s unique Tenant History Reports, is one of the best methods of insuring against misfortune and potential bankruptcy.
These credit companies show no responsibility and encourage tenants to get into debt.
“StepChange highlighted young people and renters as increasingly vulnerable, with many needing to borrow to cover the most basic everyday bills.” = all the more reason to obtain Rent Guarantee I say!
I recently had a case that showed the true power of your rent protection insurance. To cut a lonnnnnng story short I told the tenant I would take them to court and that they would eventually pay for the rent arrears owed + extra in court costs, bad credit score, etc, etc. This persuaded them to pay before the tenancy ended, so I didn’t even have to put a claim in! Thanks Rent Safe and Tenant Referencing, what would landlords do without you?!
One of my landlords has a live claim with LRS RGI and their service is excellent. They paid the rent arrears in just three weeks, and said they will continue to pay the rent if the tenant does not pay. They instructed a solicitors and they are now serving the correct notices and will if necessary do all the court work. All this for £100.00.
It took me a while to convince this Landlord ( an old hand and said I never had a bad tenant) to take out the RGI but he is very happy that he did and has forgiven me for pestering him to do it. The lesson here is all landlords should where possible try and get RGI, it the best £100.00 you will ever spend if things go wrong. It goes to show even with the best referencing things do sometimes go wrong.
Contact http://www.landlordreferencing.co.uk for adivce on RGI
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