Here at Northwood, with over 20 years experience, and over 85 offices across the U.K., we tend to notice different trends occurring in our business and across the wider private rented sector.
One trend we have noticed of late is that our Guaranteed Rent service is becoming more popular.
There are a number of reasons this is the case:
1. Uncertainty in the market
One thing landlords do not react well to is uncertainty. They like to know both short and long term how the market is going to perform, if there will be tenant demand, the cash flow they will be receiving etc.
Right now there is a great deal of uncertainty for landlords ranging from the impact of Brexit to interest rate rises, and from increasing regulation to tax changes.
Such uncertainty makes our Guaranteed Rent service a good option for landlords who want to know where they stand.
With our service, they will know that the rent will be paid on time every month, whether the tenant pays or not, or if the property is void.
2. Time it takes to regain possession of a property
The waiting lists for court hearings are getting longer! It could mean that, if you are trying to seek possession for non-payment of rent, you could be waiting up to nine months to get a hearing date in extreme cases. This means court fees along with 9 months of not receiving any rent.
There have also been a number of posts on landlord forums saying that their Section 21 hearing was thrown out by the Judge because the paperwork had not been completed to the letter of the law.
This means that the landlord is back to square one of the process.
Professional fees for gaining repossession of a property can typically range from £500 to £2,000 depending on which stage you have to go to to get your property back. If you use High Court bailiffs for the eviction, you may get a date more quickly, but it will cost more.
Then there is the hassle and emotional heartache, and a price should definitely be put on that as well.
With our Guaranteed Rent service, landlords do not need to worry about rental arrears or getting a delinquent tenant out of their property. If it came to it that the tenant did not pay, then Northwood would be responsible for the costs of gaining possession.
Having said that, Northwood undertake rigorous and robust tenant referencing for all our landlords, no matter what level of service they choose, so this greatly reduces the risk of getting a rogue tenant in your property.
3. Tenant affordability
The media is full of stories that tenants are increasingly struggling to pay the rent and that in some areas like the south east, the rent can be up to 75% of the tenants take home pay.
A significant number of tenants do not have any savings to fall back on, which puts their ability to pay the rent into question, should they be unable to work.
Research from insurer, Royal London has revealed that 5.8 million working private renters do not have a plan B in place to cover their rent if they or someone in their household became too ill to earn an income for three months or longer.
The survey of over 2000 UK adults revealed that over a third (39%) of working renters have no savings at all, compared with around a quarter (23%) of the wider population. Nearly three in five (58%) of renters have less than £2,000 in savings.
So if a tenant loses their job, then they may struggle to pay the rent almost immediately as they have no savings to fall back on.
Again, with Northwood’s Guaranteed Rent service, there is no problem should the tenant lose their job, have an accident, or experience any other of the many curve balls life can throw at people.
Northwood has a track record of building long-standing relationships with landlords, and indeed, we have one landlord on our books who has had Guaranteed Rent running for 14 years and has never had a late or missed payment!
We invite anyone interested in our Guaranteed Rent service to contact their local office to discuss the rent that could be offered. It will depend on the property, the area, and the local lettings scene.
All of our offices are pleased to talk though our various service options which range from Tenant Find Only through to Fully Managed and Guaranteed Rent.
Our Guaranteed Rent service is trusted by over 13,000 landlords across the UK, and that number is rising. It’s not hard to see why.
Find your nearest Northwood office >>> here.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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