Growing arrears risk may hit agents claims PropTech firm

Landlords and agents face a growing risk of rent arrears and tenant fraud because of the cost of living crisis.

That’s the view of PropTech company The Lettings Hub, which is urging the Lettings Industry to protect itself against economic challenges.

The statement comes as half a million tenants around the UK are in rental arrears and 200,000 are undergoing eviction proceedings.

Gail Parker, chief commercial officer at The Lettings Hub, says: “With inflation now over nine per cent, salaries just aren’t keeping up, and as the average family struggles to make ends meet, rental arrears will naturally increase. With the risk increasing and landlords already exiting the market, it is even more critical for agents to hold onto their landlords and protect their reputation and income. 

“We – and others in our sector – have a duty of care to agents and landlords to ensure they know what options they have available to protect themselves.”

The Lettings Hub says it’s currently taking up to 15 months to obtain possession of a property due to court backlogs and an increase in the number of cases being defended by the tenant. With the new rental reform White Paper proposals this process could become even more challenging. 

“Citizens Advice Bureau advises tenants not to move until the landlord has a possession order. Possession orders do not cover the rental arrears, so a separate case is then required for recovery of unpaid rent. It’s why court eviction costs average between £1,300 and £2,200 but the average insurance claim for a defaulting tenant for UK landlords is £9,300” adds Parker.

She is urging them to take out protection measures for the loss of rent.