What can a landlord do when a tenant stops paying their rent?

that rental demand has increased by 15%. Despite this increase demand is still outstripping supply and according to their research an average of 5 people are competing for every one property.

With unemployment at around 8% (National Statistics Office, June 2011), banks enforcing strict lending criteria and general economic uncertainty, it is not surprising that demand for rental property is high. First time buyers can no longer benefit from 100% mortgages to purchase their properties, which leaves very little to inspire confidence. Ever-increasing living costs and spiralling inflation are added factors that cannot be ignored either. With new government initiatives only helping a small percentage of first-time buyers it is obvious why so many will have to rent for longer than planned.

This has left landlords with a positive outlook towards their investment properties with many of the cash-rich continuing to grow their portfolios. The demand for landlord insurance has therefore increased in recent years.

However, the life of a landlord is not always as easy as one may think. There are many reasons why problems might occur during a tenancy. One of the most common issues is tenants not paying their rent. Perhaps a perfectly good tenant might have lost their job and is finding it hard to pay the rent or a couple have split up half way through their tenancy agreement. In other circumstances, it’s fair to say that there are some tenants that were always going to be a problem no matter what.

When a tenant stops paying their rent they are not only in breach of their contract but they start to cause the landlord un-needed stress, mainly because chasing rent soon becomes a time-consuming process and the landlord may start to face financial difficulties. If this happens then the landlord should first write to the tenant and ask them to discuss the situation. The landlord should always try and resolve any issue with the tenant amicably, although clearly this isn’t always possible.

In many cases, the landlord may decide to terminate the tenancy agreement altogether. In such a scenario, a notice is served and then the court takes possession and finally ends the contract. This should be a last resort especially in cases where the financial difficulty may be a temporary one, such as the tenant losing a job etc. The landlord should try to offer and accept other modes of payment such as negotiating part payment terms for a temporary period until the tenant is able to find a new job etc. However, there may be cases where the financial situation of a tenant has changed drastically and receiving the arrears for the rent might not seem possible. In such cases, it is best for the landlord to ask a court of law to intervene and re-gain possession of their property so that they can let it out to a new tenant to avoid further losses. Because of the potential issues that may arise it is always advised that a landlord should speak with an insurance brokers about special cover that includes legal expenses and rent guarantee.

Tags: property, positive outlook, court, small percentage, confidence, financial difficulties, investment

Turner wants FSA to have more power to protect bank customers

The reputation of banks, and the confidence that consumers have in these financial institutions, has plunged over recent years, since the onset of the global credit crisis in 2007. With this in mind the chairman of the UK’s financial regulator, the Financial Services Authority, has called for the authority to be given greater powers to protect bank customers.

Lord Turner said that the FSA needs greater powers in order to protect consumers. The FSA is now set to launch a discussion paper based on the protection of bank customers. The debate will be centred around how the FSA could help, and what sorts of measures it could take in order to protect customers.

Officials from the FSA said that they want to find ways to take action to protect bank customers earlier on rather than having to wait until a number of complaints have been made before any action is taken. Some of the measures that the FSA is likely to look at will include the banning of some financial products, and a cap on the fees that are being charged on a variety of other financial products.

Lord Turner is set to argue that the FSA, or its replacement agency if it is disbanded, should be given greater powers to give bank customers the protection that they want and need. This comes following a surge in activity at the FSA, which has been cracking down on insider dealings, and has enforced a greater number of fines over the recent years.

Referring to the debate one FSA spokesperson said: “The debate will be about the types of things we do, different product regulation. Rather than waiting until lots of consumers have had to make complaints, can we take action earlier?”

Tags: agency, onset, replacement agency, confidence, hector sants, cap, financial, paper

Scottish consumers want more choice when it comes to banks

According to a recent report consumers in Scotland would be keen to see increased competition when it comes to High Street banks, and would like to see a greater choice of High Street banks. A survey was carried out by accountancy firm Deloitte, and the results showed that consumers would like to see more banks entering the market so that they have more choice with regards to which bank to use.

This comes despite the fact that consumer confidence in the banking industry is still low following the global financial crisis and the recession. However, whilst consumers are looking for more choice when it comes to the banking industry it also emerged that many would be worried about handing their money over to a new entrant in the market, especially in the current financial climate.

The Independent Commission on Banking has already launched an investigation into the state of competition in the UK’s banking system, and there is particular concern over competition amongst banks in Scotland because the Royal Bank of Scotland and Lloyds TSB are the dominant players in the sector.

The survey showed that around 30 percent of Scottish consumers wanted to see more choice when it came to High Street banks, and around 17 percent have switched some part of their banking to a rival provider, such as their savings accounts or mortgages. Deloitte officials said that these factors showed that there was room for new entrants to the banking sector in Scotland.

One official from the accountancy group said: “Our findings suggest that consumers will look to more established and recognised brands who extend into banking, with one in 10 saying they would be happy to bank with any large ‘household brand’. Further, consumers are more likely to take out certain products such as savings accounts from new entrants, but remain cautious about committing to longer term products such as mortgages.”

Tags: bank, recent report, confidence, lloyds tsb, savings accounts, high street banks, official

Mortgage market in Scotland sees improvement

Recently released data has shown that the property and mortgage markets in Scotland have shown surprising improvement in the second quarter of this year, with officials expressing surprise over the figures that have been released by industry groups.

Figures were released by the Council of Mortgage Lenders, and it appears that things have improved with both first time buyers and home movers in Scotland. Officials have said that they will be keeping a close eye on the property and mortgage markets in Scotland for the remainder of the year, and could find that the markets outperform those in the rest of the UK if the performance continues as it has done so far.

The Council of Mortgage Lenders said that in the second quarter of this year the number of mortgage agreements for first time buyers increased by an impressive 18 percent, bringing the total for the second quarter to 4700. The total value of these mortgages came to £419 million, and this reflected an increase in total value of 27 percent compared to the first quarter of the year.

The figures from the Council of Mortgage Lenders also showed great improvements in the mortgage and property markets for those that were moving house. Over the course of the second quarter of the year 8000 loans were taken out, and this reflected an increase of 36 percent, which has surprised many experts.

It is thought that part of the reason behind the improvements in these markets is that lenders in Scotland appear to be getting more relaxed when it comes to granting and approving mortgage loans. The average deposit requirement for first time buyers has fallen from 23 percent to 21 percent, and some think that this may have helped to renew hope and confidence amongst buyers.

Tags: council of mortgage lenders, confidence, scotland, mortgage markets, Mortgage loan

Woolwich launched cheapest mortgage since first loan

According to recent reports the Woolwich recently launched its cheapest mortgage deal since its first loan, which was made around one hundred and sixty years ago. Read more

Tags: woolwich, mortgage, low interest rates, confidence, first time buyers, cheap mortgages, bank of england, fixed rate mortgage

RBS unveils huge losses

Banking giant, Royal Bank of Scotland, which also owns NatWest, has recently revealed huge losses of around £28 billion, which reflects the biggest loss in British commercial history. Read more

Tags: history, giant, Banking, bailout packages, package, rbs, prime minister, confidence

Bank rate cut by a further 1 percent

The Bank of England has cut the base interest rate buy a further 1 percent in the third rate cut in as many months. The rate cut took place following the December Monetary Policy Committee Meeting, where it was decided by committee members that a further cut in interest rates was necessary in order to try and boost the flagging economy through increasing consumer spending. Read more

Tags: committee, right, base rate, interest rates, confidence

UK consumer confidence at all time low

Consumer confidence in the UK is at an all time low, according to figures from the Nationwide Index.

The findings show that the number of people confident about employment dropped almost ten per cent to 36 per cent in January, a drop from 44 per cent in December.

Expectations surrounding house price growth continued to fall with consumers thinking house prices would decrease by 0.2 per cent over the next six months.

Martin Gahbauer, Nationwide’s senior economist, said: “The continued downward trend in consumer confidence in January is not unexpected in light of current uncertainties about the economic outlook.”

He said that sharp falls in share prices, the rising costs of essential items and a weak exchange rate have all combined to negatively impact consumer sentiment which could be blamed for the pessimistic economic outlook.

Despite a downturn in the Expectations index, 44 of respondents believed that now is a good time to spend on household goods, compared with 35 per cent in December.

Meanwhile, Nationwide has warned credit card holders to be careful to avoid incurring charge while using their cards abroad.

Tags: downturn, consumer confidence, cent, economist, share prices, confidence, Index numbers

UK business confidence affected by credit crunch

A recent report has shown how business confidence levels across the UK have been affected by the effects of the credit crunch that was sparked in the sub-prime sector of the United States.

The credit crunch made its way across the Atlantic and took effect in the UK and in other countries around the world back in August, and since this time the levels of optimism and confidence amongst businesses in the UK have fallen significantly according to recent figures.

The figures were revealed in the quarterly Business Opinion Survey released by the Institute of Directors in the UK. According to the figures on the reports around a quarter of company bosses were optimistic and confidence about business prospects at the beginning of August before the effects of the credit crunch took hold in the UK. However, more recent figures indicate that this level has now dropped to just 4%, reflecting the adverse effect that the credit crunch has had in terms of UK business confidence.

Around 15% of company bosses stated that the credit crunch had affected sales and performance for their business. Back in August around 77% of company bosses said that their business was performing well rather than badly, but even this has dropped to around 73%. A spokesman from the Institute of Directors stated: “This is a pretty gloomy survey, with the decline in business confidence worrying.”

He also added: “Thankfully, actual business performance remains high. Across the whole economy there is a real divide between the actual impact of the financial crisis to date and expectations of what it might bring in the future. The key question now is whether optimism will bounce back because, if it doesn’t, business investment could be hammered.”

Tom Smith
19th November 2007

Tags: concern, economy, confidence, sales, business

Bank holds interest rates

The Bank of England has held interest rates at 5.75 per cent for the fourth month in a row.

The decision, announced at noon on Thursday, comes as no surprise with many analysts predicting such a freeze well in advance.

Ongoing uncertainty in world financial markets and the rising price of oil led members of the Bank’s Monetary Policy Committee (MPC) to keep rates at their current peak.

That will mean prolonged misery for many homeowners, struggling to cope with high mortgage payments.

Chief executive of the National Association of Estate Agents (NAEA), Peter Bolton King, was critical.

He said: “I would have hoped that the Bank of England would have considered this month’s rate movement carefully as confidence in the market needs to be restored and a relaxation of interest rates would do just this.

“The last 12 months has been an extremely busy period for the housing market and consumers are crying out for reassurance.”

Tags: confidence, market, consumers, Monetary policy, executive, committee

A fall in consumer confidence in banking

A recent survey has shown that there has been a significant fall in consumer confidence when it comes to banking in the UK, with much of this decrease being blamed on the recent turmoil and chaos with Northern Rock.

As a result of this overall, confidence in banking and finance in the UK has taken a tumble state researchers from Teamspirit, which carried out the survey. According to the results most sectors of the banking and finance industry have been affected by this fall in consumer confidence.

One industry professional stated that the recent Northern Rock situation had had a profound effect on consumer confidence in banking and finance, stating: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

The survey involved polling around 2500 people, and showed that fewer than half of consumers trusted banks and building societies, and just a quarter now trusted online banking. The number of people that still trusted building societies was slightly higher than banks, with around 48% stating that they still had trust in building societies. Around 46% now have confidence in high street banks, and just 25% are confident when it comes to online banking.

The recent credit crunch that has spread from the sub-prime sector of the United States has also affected the level of consumer confidence in banking and finance, according to officials, with financial markets in the UK and around the world facing turmoil as a result of repercussions of the credit crisis sparked in the United States. Banks and lenders have now had to raise interest rates on many areas of lending, which has further affected both confidence and affordability in terms of finance.

Tom Smith
3rd November 2007

Tags: Banking, northern rock, confidence, bank, finance

CML: House prices not affected by mortgage shortage

The reduction in the availability of mortgage products is unlikely to affect house prices.

According to the Council of Mortgage Lenders (CML), the sub-prime sector is most likely to be affected and this would have only a minimal impact on the housing market in the UK.

Bernard Clarke, a spokesperson for the CML, explained: “The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there’s a shortage of supply.

“Those fundamentals will continue to underpin the market to a much greater extent than any shortage of mortgage products to customers.”

He added that despite fluctuations, uncertainty and speculations over a possible collapse, there remains confidence in the market.

Moneyfacts has recently revealed that the availability of buy-to-let and residential mortgage products has reduced by 40 per cent in the last few months.

Furthermore, 72 per cent of bad buy-to-let mortgage products were taken off the market as well as 54 per cent of bad credit residential mortgage products.

Tags: housing market, confidence, economics, supply, sub-prime sector, Mortgage loan, shortage, uk

Consumer confidence in banking falls

According to a recent survey the levels of consumer confidence in banking have fallen recently, and experts state that much of this reduction in confidence has been fuelled by the recent turmoil and chaos faced by Northern Rock.

The survey was carried out by Teamspirit, and showed that levels of confidence in banking and the finance industry as a whole have taken a real knock over recent weeks, affecting many sectors of the finance and banking industry.

Almost 2500 people were polled as part of the survey, and the results showed that only 46% of consumers now had trust in high street banks. A slightly higher number of consumers expressed confidence in building societies, with 48% stating that they trusted building societies. Online banking also took a hit, with just 25% of consumers stating that they trusted inline banking – experts state that this could be partly due to severe problems that Northern Rock customers experienced over the past couple of weeks.

One official that was involved in the survey stated that the whole Northern Rock situation had resulted in a damaging effect in terms of consumer confidence in finance and financial institutions.

She said: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

Another factor that has also affected levels of consumer confidence according to many experts is the turmoil that has hit the financial markets over the past month, which was sparked by the credit crunch in the United States. This has had global repercussions, affecting many areas of the financial sector in the UK as well as in other countries.

Tom Smith
25th October 2007

Tags: society, accounts, finance, building, confidence

High tenant demand benefits buy-to-let investors

Confidence in the buy-to-let sector is sky-high, with landlords reporting an increase in average yields and plans to expand their portfolios.

A buy-to-let trends survey of landlords by Paragon shows that despite rising interest rates, landlords are more confident than ever in their property investments.

Paragon’s confidence index – which is based on the value of their property portfolios now and their expected value in twelve months’ time – is now standing at 160, up from 155 last quarter and from 150 a year ago.

John Heron, managing director of Paragon Mortgages, commented: “Landlords are confident because tenant demand is strongly underpinning the market.

“Young people are choosing to stay in rented accommodation for longer, while there are a growing number of students and immigrants who are fuelling demand for rented property.

“Just this week we have had data on record numbers of students and strong net immigration figures which indicate demand for private rented property will continue to rocket.”

High tenant demand has meant that landlords can up their rents, counteracting the squeeze from rising interest rates and higher house prices.

Slowing in the housing market has also been beneficial, with landlords taking advantage of the dip and building their portfolio, and many plan to continue to do so over the next year.

Tags: confidence index, landlords, john heron, Paragon, confidence