Tenant defaults could soar over the the coming year amid reports that lots of have borrowed money on credit cards to pay for their mortgage or rent over the past yr, warns top tenant eviction and hire collection firm Landlord Help.

The warning comes following a YouGov poll for housing charity Shelter which reveals a disturbing image of more than two million folks taking desperate actions with credit cards to maintain a roof more than their heads, a rise of more than 50 % previously yr.

In spite of encountering a buoyant 2010 and demand for rental properties currently exceeding supply, tenant arrears have remained a genuine concern for landlords.

These worries are unlikely to have been eased see how to avoid of this stark information and with public sector shelling out cuts set to consider their toll on employment and tenant finances this year.

Landlord Help is urging landlords to consider precautionary actions to protect their organization interests.

Graham Kinnear, MD of Landlord Help stated: “News of tenants spending money on their hire with credit cards is worrying for landlords. By paying the hire with credit cards tenants are effectively swapping one debt for an additional and inevitably this might push some right into a spiral of debt.

“The longer this pattern continues the greater we will see folks struggle to cover their rents and end up in significant arrears using their landlords.

“We at Landlord Help are worried that this problem is only going to worsen specifically as rents are expected to increase further this season. This combined with VAT increase, anticipated increase in rates of interest and Government shelling out cuts, the impact which is likely to be felt hard over the coming months, will place tenants under growing financial strain.”

Stephen Parry, commercial director at Landlord Help, stated: “Rent arrears can severely impact a landlord’s cashflow and ability to pay out their very own home loan.

Referencing is really a key part of the letting process and we strongly urge landlords to lessen the likelihood of being exposed to arrears by referencing prospective tenants.

“Likewise we urge landlords to consider extra protection using a hire guarantee policy to safeguard them when their tenant loses their task or suffers any other major alternation in their financial conditions.”

Total referencing from Landlord Help can be undertaken for as little as £9 and includes landlord and employer referencing together with an extensive credit report about the prospective tenant.

Landlord Help offers a Hire Assure scheme in cases where tenants default on payments and where properties require any remedial work to become completed.

The policy pays landlords any hire arrears accrued while the tenant occupies the home and can pay out 50 % of the hire after the tenant has vacated the home, for a maximum of 3 months, when repairs require undertaking prior to its re-letting.

The scheme can be obtained with Landlord Assist’s Plus Referencing service for just £60 for a couple of months policy and £90 for a 12 month phrase. In addition, cover can be obtained for existing tenants having a 90 day exclusion clause.

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