Rising Unpaid Rent Arrears sees surge in Landlords seeking rent insurance

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rise in unpaid rent arrears
Rising Unpaid rent arrears across the UK has seen a sharp upturn in Private Landlords seeking rent protection insurance. Data from different firms suggest there’s been an upsurge in the purchase of rent protection insurance by various different agents.

More buying insurance products

Firstly, Goodlord and Vouch claims that 17 per cent more agents are buying insurance products now compared to this time last year, presumably on the instruction of their landlord clients.According to Goodlord’s monthly rental index, average tenant income is 12 per cent higher across England now than was the case 12 months ago.
But, with rental costs now 10 per cent higher compared to 2021, combined with rising utility bills and spiralling food prices, tenants are feeling the pressure. This has fuelled the rise in unpaid rent arrears and the UK. Most rental insurance policies help cover legal costs associated with evictions or the recovery of rent arrears. They also ensure landlords can receive income whilst properties involved in any disputes are vacant.

Spokesperson says:

A Goodlord spokesperson says: “There was a big uplift in demand for rental insurance products during the pandemic, but this demand has only intensified over the last year. As the economic waters become choppier, agents are quite rightly altering their proposition to support landlords accordingly – loss through non-payment of rent can have majorconsequences for individuals. Those that have insurance in place can safeguard against this and ensure they have the support needed to legally and constructively navigate any issues that might arise.”

Paymentshield

And general insurance platform provider Paymentshield has seen a 57 per cent increase rent protection as an optional extra alongside its landlord’s insurance product.Louise Pengelly, proposition director at Paymentshield, says: “Given the current cost-of-living crisis, it’s no surprise that more and more people are struggling to pay the rent, which creates a knock-on effect across the entire economy with landlords in turn feeling the fear.“Many ‘accidental landlords’, who perhaps inherited a property or were left with an empty property after moving in with a partner, are now relying heavily on that rental income, where once it may have just been seen as a means of topping up their earnings.”

There has also been a reported rise in evictions since lockdowns ended along with unpaid rent arrears.

Debt Collection for Unpaid Rent Arrears

With Unpaid rent arrears at record highs since covid, the Debt Collection industry has been flooded with Private Landlords seeking to recoup losses by way of rent arrears debt collection.

Traditionally, the recovery rate for the debt collection of unpaid rent arrears is fairly low when compared with other sectors.

Absconded and unruly tenants make for difficult debtors. The lower down the scale you go and the harder rent arrears become to collect.

Housing Associations are owed millions across the board. Whenever they try to take action they are very much met with hostility from local press as if they are the wrong doer. People forget that in order for housing associations to work, they have to be financial sustainable. Non payment of rent is detrimental to that long term.

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