Location, location, location – just as important for landlords
by Sarah Ashcroft
With tenant arrears on the rise, it is more important than ever for landlords to ensure they will be able to collect their rents. LSL Property Services revealed this month that tenant arrears reached their highest level in April since January, with 9.9 per cent of all rent being late or unpaid. Total rental arrears topped £300 million last month, up 14 per cent on the previous month, according to the figures.
While landlords can use a section 8 notice
to evict tenants in rent arrears, it is much better not to get into that situation in the first place.
Stuart Law, chief executive at Assetz, believes the old mantra of location, location, location applies as much to rental properties as private dwellings. He cautions against buying a property in an area with, for instance, high unemployment.
"Those poor quality areas with very cheap property are cheap because people are finding it hard to get mortgages because they are not [seen as] good, creditworthy borrowers for banks. In the same way, they are not good tenants for landlords," Mr Law says.
He argues that the figures from LSL actually "hide a multitude of evils", meaning there are lots of places where arrears levels are much higher than 9.9 per cent.
In good quality locations, where professionals live, landlords will likely find "almost no arrears at the moment", adds Mr Law. "In fact, I have seen a reduction in arrears over the last three or four years," he argues.
The LSL figures also pointed to why rental arrears may be rising. In addition to unemployment continuing to be a problem, rents are on the rise. Rents increased
by 0.5 per cent on monthly basis as rental demand increased, with annual rental inflation standing at 2.4 per cent, according to LSL.
- Landlord and Tenancy News from Lawpack: Solicitor-approved Section 8 Notice template with expert guidance on how to evict a tenant for rent arrears
Published on: May 24, 2012
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