Landlords - How to reduce rent arrears

Landlords – How to reduce rent arrears

@NRLAssociation recently picked up on the current big news for landlords in a tweet. They tweeted that “Rent dodgers will be rewarded under new rules allowing tenants to build almost 18 months of rent arrears without any sanction…”

This is due to the government’s new regulations, which were published on 16th November 2020. They mean that tenants can build up almost 18 months of rent arrears without any sanction.

Until 11th January 2021, landlords can only take tenants to court for rent arrears that total nine months or more that was built before 23rd March. The thinking behind this is clearly to protect the renting population in the context of the Covid pandemic, due to so many people being furloughed and even losing their jobs. However, the consequences of this decision have been hard on landlords.

Ben Beadle, NRLA Chief Executive said of the government’s decision: “In trying to arrive at a compromise the Government has failed to help those in genuine need whilst rewarding those whose arrears have nothing to do with the pandemic, and in some cases.”

Avoiding debt

So, if you are a landlord, what can you do to avoid being burdened with debt? Ben Beadle went on to say that the Government should instead offer out of work tenants a financial package that would enable them to pay their rent, rather than simply not allowing them to be sanctioned.

2020 has seen the rental property market experience numerous ups and downs. The first lockdown in the spring saw everyone stuck in their homes, even if they were due to move. Of course, in the second lockdown (throughout November 2020) moving was permitted for renters and homeowners alike, in order to help keep Britain’s economy afloat.

However, the amount of financial support being offered in November 2020 meant that a lot of under-35s were relying on benefits to pay their rent. The amount of financial support that they are receiving was enough to cover a room in a shared house, forcing them into a situation where they had to mix with people.

Splitting your property

For landlords, however, splitting your rental property into a shared rental property after it has been leased as a private property might help to reduce your rent arrears. There are some other options to help landlords reduce rent arrears.

You could consider deferring rent payments, or even suspending them altogether to help tenants through any financial difficulties brought on by the pandemic.

In that situation, a letter confirming that the tenant is unemployed or furloughed would be useful evidence to ensure your help was going to people who were really in need.

Landlords and tenants are expected to work together to produce an affordable repayment plan, so it is essential to have a good relationship with your tenants. This is good practice for landlords as it helps to demonstrate that you are a reasonable person and encourages the tenant to be reasonable, responsible and reliable also.

This behaviour is something that we at CheckedInn do for all of our landlords as your intermediary.

Get in touch to find out more about renting out your Cambridge property to reliable, friendly, and professional tenants.