Rental arrears still on the rise

It has been claimed by a property firm that the level of rent arrears amongst private tenants has increased again. According to LSL rental arrears for the month of December increased compared to November, rising from 10 percent to 12 percent. The data was collated as part of a monthly survey that was carried out by LSL, and showed how financial problems were impacting on the abilities of private tenants to keep up with their rent.

According to LSL the level of rent that was either paid late or not paid at all increased by 2 percent between November and December of 2010. In addition, the value of unpaid rent increased to £276 million. Officials from the company said that rising unemployed had impacted severely on the ability of private tenants to pay their rent, and that continued increases in unemployment levels following government cutbacks would see the problems with rent arrears continue.

The data also showed that in the month of December the average rent charged by private landlords actually decreased slightly by 1.2 percent to £684 per month on average. This was because they wanted to try and tempt prospective tenants during the cold winter period, and many prospective tenants did not venture out in the cold weather to look for property.

An LSL official said: “Arrears have been rising since October as public sector spending cuts start to bite in many areas of the country. With unemployment set to increase this year, and rents likely to rise once more in the spring, more tenants will be at risk of falling behind with rent payments.” He added: “Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period. If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents re-start their upwards march before the spring.”

Tags: costly void period, december, average, private landlords, Leasehold estate, landlord, sector spending cuts, Renting

Consumers should “prioritise” when deciding on house insurance

Consumers need to decide what their main concerns are when making the decision on whether they can afford a home contents insurance policy, the British Insurance Brokers’ Association (Biba) has said.

Many policies are not overly expensive and cheaper prices are also available from some major metropolitan authorities and private landlords who buy in bulk, according to Peter Staddon, head of technical services at Biba.

Although this means that it is easier for people on low incomes to gain access to these insurance policies, Mr Staddon acknowledged that “if it comes down to a choice between putting food on the table for the children or insuring the house, the broker is failing”.

He concluded that consumers would have to decide whether home contents insurance was a priority for them, however, he also warned of the dangers and financial consequences that people without house insurance face in the event of a disaster.

Experts have noted that the insurance industry is looking for ways to make home contents affordable for those on low incomes, following the summer flooding last year.

Tags: British Insurance Brokers Association, consumer, head of technical services at Biba, BIBA, metropolitan authorities, disaster experts