Landlord Disaster Recovery - The 'Ultimate' Rent Protection for Landlords
We thought the massive spike in rent arrears due to the pandemic over the last two years was behind us, then, along comes the cost of living crisis and a rise in interest and mortgage rates to put enormous pressure on homeowners, landlords and tenants. Landlords need to mitigate their risk of rent arrears and we have the ultimate protective shield.
Unfortunately, there are occasions when a tenant simply fails to pay the rent. The COVID-19 pandemic saw a rise in non-payment of rent, albeit through no fault of the tenant.
The current cost of living crisis is causing continued hardship for everyone and landlords need to have an open dialogue with their tenants and ensure their rents are protected. Private landlords who manage their rental properties themselves and don't use a letting agent are particularly at risk, as they are statistically less likely to have rent guarantee insurance in place.
Landlords will inevitably face a 'double whammy' from potential rent defaults and rising mortgage interest rates.
Leading insurers say they are already seeing a growing number of rent defaults as families struggle to cope with the rapidly rising energy price cap.
Andy Halstead, CEO of leading rent guarantee provider Let Alliance is very blunt when describing the current situation;
“Is it a risk? Definitely. What are people going to do if they don’t have enough money?” he says. “I’ve been running rent guarantee books for the best part of 20 years, and whatever the economic cycle we get through it and always have, but we’ve never really been faced with anything quite like this".
“Do I think we’re heading for increased rent arrears? Definitely. No doubt about it. We’ve seen rent guarantee claims increase this year already by 15%. It’s starting to feed through.”
He says if families don’t have enough money to pay their bills, they are faced with a bleak choice.
“You can imagine, you are sat there on pay day saying, ‘We don’t have enough money’. You then have to pick what you pay and what you don’t pay. What choice do you have? This isn’t about people not meeting their responsibilities, it’s about an impossible scenario.
“The average family is going to suffer like mad, let’s be honest about it. This is really ugly.”
Halstead believes there are no easy answers, but does offer a crumb of comfort by saying that rent payments are usually the last bill that tenants will stop paying.
“What I can tell you from years of experience and analysis of claims, when rent isn’t paid it is usually the last thing to go wrong. So what people have usually done by the time they don’t pay the rent is they have exhausted all other avenues – they will be in arrears with credit, loans, cards, HP. Why? Because they lose their home if they don’t pay the rent."
“Rent arrears are a very good barometer of the state of what’s going on out there. If and when rent arrears start rising, what it’s telling you is there is a serious crisis across the population.”
In the current climate, it has never been more important for letting agents to provide rent guarantee to their landlords. In a world of great uncertainty, it is essential risk management for landlords’ rents and legal costs to be protected along with the letting agent fee income.
Landlords without any rent guarantee protection may be in for a shock! Those who do have such cover can rest easy. For those landlords who don’t have cover, the implications can be awful, especially if there is a mortgage on the property and the rent is relied upon to help make the necessary loan repayments.
Professional Properties can now offer the ultimate rent protection cover; Landlord Disaster Recovery.
- NIL Excess
- Full Rent Protection for the total monthly rent, for up to 4 tenants as named on the tenancy agreement - provided all are referenced and have passed (excluding Houses of Multiple Occupation).
- Full Rent Protection for up to 15 months or until vacant possession is obtained, whichever is the soonest up to £50000.00.
- Up to three months’ rental payments at 75% following vacant possession now included.
- Cover up to £2500 rent per calendar month.
- Available for 6 or 12 month tenancies.
- £100,000 Legal Costs in order to obtain Vacant Possession.
- Cover includes breaches of the tenancy agreement by the tenant, including non-payment of rent and expired notices seeking possession.
- Cover should a tenant defend the action taken, that means that we’ll continue to pay the claim until the challenge has been resolved.
- No involvement in claims process.
- Professional Properties representative will attend court on the landlords behalf.
- Serving Section 21 and/or Section 8 notice to regain possession of the property if required
- Cover available Monthly or Annually.
- Cover even when the tenants change (subject to satisfactory references)
- Covid-19 cover included
- Full lock change on the property if required
We believe that this is the best landlord rent protection cover on the market. It really is a no brainer!
Please contact me on 01332 300115 to discuss your individual requirements in detail.
