Almost half of landlords have had tenants default on rent payments and a quarter have been left with huge repair bills at the end of tenancies – with one landlord left £16,000 out of pocket. Could replacing a traditional deposit with a deposit replacement insurance incluign a rent guarantee be the answer?
New research has also seen landlords report:
- 26% of tenants breaking property and refusing to pay.
- 16% of tenants refusing to leave at the end of their tenancy
- 22% of privately rented properties having extra residents not listed on the tenancy agreement.
As a result the research reports that 37% of landlords say that their biggest worry is “problem tenants”.
The research also reported that 60% of landlords are either ‘accidental’ or ‘casual’, renting out one property to supplement their main income or managing a family property.
The figures were revealed as new legislation allowing tenants’ rent records to be included in their credit history moved to the next parliamentary stage.
The Creditworthiness Assessment Bill addresses the fact that the rental payments of the UK’s 11m renters do not contribute to their creditworthiness in the same way mortgage payments do, limiting the effectiveness of traditional tenant vetting.
Ajay Jagota is founder of deposit free renting firm Dlighted
Dlighted lets landlords and letting agents let properties with zero deposit by replacing traditional tenancy deposits with low cost deposit replacement insurance.
It’s Trusted Tenant vetting system also allows landlords and letting agents to assess a prospective tenant’s rent payment history and insurance claim record.
“We’re constantly told deposits are the only way to protect landlords, but when the cost of tenant damage exceeds the value of a deposit held in a Deposit Protection Scheme, or rent goes unpaid for a month or more – or both at the same – that protection is completely illusionary.
“If you end up in a deposit dispute with a tenant you’re looking at months of waiting to get your money, even if your property is un-rentable until you can afford repairs, and assuming your deposit coves the cost.
“If you have to evict a tenant for severe rent arrears, they refuse to leave leaving you with significant legal costs, and you find significant damage to the property when you regain access– which as these figures show is surprisingly common – there is no way a deposit will be enough.
“Deposit free renting using low-cost deposit replacement insurance on the other hand offers landlords a rent guarantee and hundreds of thousands of pounds of protection against property damage and legal fees.
“So many landlords are worried about problem tenants, and rightly so – traditional tenant vetting tells you next-to-nothing about a person’s reliability as a renter, and reveals nothing at all about their track record of paying rent on time or causing property damage. And it certainly doesn’t give you a rent guarantee!”
Figures from MakeURMove