According to a recent report by Which?, two million UK households missed or defaulted on at least one mortgage, rent, loan, credit card payment or bill last month. Missed housing payments were particularly high among renters, with 1 in 20 polled (700,000) UK households, saying they had missed a payment in the last month (April). These missed rent payments have stayed at a high rate throughout the last year, showing many are struggling to keep a roof over their heads.
The rising cost of living could cause a rent-arrears crisis in social housing, with low income and high costs being the main reasons why renters tend to fall into arrears. According to a report by Housing Digital, the rising cost of living may push those who are already vulnerable over the edge and into arrears, resulting in a rent-arrears crisis. Financial pressures on social housing providers to function efficiently, specifically in the collection of rents, can also result in challenges to balance their responsibility towards existing and future tenants. This can put tenants who are struggling with rent arrears at risk of eviction, which can devastatingly lead to homelessness.
What landlords should do if a tenant misses a rent payment.
When a tenant misses a rent payment, the landlord can take several steps to address the situation. As a first step, the landlord should try to communicate with the tenant to determine why the rent has not been paid and when it will be paid. The landlord should send a formal Late Rent Notice to properly document their attempts to get the tenant to pay. If the tenant still does not pay, the landlord can send a final "pay or quit" notice, which lets the tenant know that if they do not pay, they will be kicked out of the property.
If the issue cannot be resolved, the landlord may have to take legal action, such as filing for eviction or suing for unpaid rent. Overall, it is important for landlords to understand the laws and processes for sending late rent notices and collecting late rent payments, as well as the potential legal repercussions for failing to comply with tenant protections and rights.
How Guaranteed Rent combats rent arrears for landlords
The Elliot Leigh Guaranteed Rent scheme can provide landlords with some protection against rent arrears and as a result, a steady flow of income. When landlords join our scheme, we guarantee the rental income to them, regardless of whether the tenant pays or not or even if the property is vacant.
As collecting rent and managing arrears is no longer the responsibility of the landlord, it reduces financial risk as landlords are protected against potential rent defaults and the costs associated with evictions or legal proceedings.
The consumer body has been calling on businesses in essential sectors such as food, energy and telecoms to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during the cost of living crisis.
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