Challenging tenants lead to mass exodus from the rental market

Challenging tenants lead to mass exodus from the rental market

A third of British landlords could be forced to sell due to problem tenants, who leave rent unpaid and damage running into thousands of pounds.

Nearly half (47%) of landlords surveyed have had issues with tenants who don’t pay the rent on time. This data comes from a survey commissioned by MakeUrMove, who asked 1,000 landlords about their perceptions of the changing housing market and their role within this market.

A quarter of landlords have also faced large bills when tenants have left properties in a state of damage and disrepair. Many have had to pay thousands to restore their property after a tenant has moved out, with one landlord surveyed left with £16,000 of damage. Landlords say damage caused by tenants far outstrips the sum of the deposit usually taken at the start of the tenancy and held in the government-backed Deposit Protection Scheme.

This pressure is leading the majority of ‘good’ landlords, who try their best to support tenants, to feel they can’t continue to rent out their properties. The study found 98% of landlords believe it’s important to keep tenants happy and 92% have a good relationship with their tenants. Despite their best efforts, landlords are suffering when tenants don’t repay the favour, with 37% of landlords saying their biggest worry is problem tenants.

MakeUrMove managing director, Alexandra Morris, said: “60 per cent of British landlords are ‘accidental’ or ‘casual’ landlords, meaning they only have one property and rent it out to supplement their main working income. As these landlords make up the backbone of the British property market, it’s important they feel happy to carry on letting. Stress and financial pressures caused by ‘challenging’ tenants is a sure fire way to put them off and steer them away from further investment.

“This could also be a real worry for smaller landlords when it comes to cash flow. Generally, as long the rent is coming in every month to cover mortgages and other associated costs, smaller ‘casual’ landlords don’t often plan for bigger costs caused by damage from tenants or lack of funds due to unpaid rent. As a result, when a big outlay comes around, some landlords find themselves in trouble, and there’s very little protection offered from the government against these things.”

Nearly half (47%) of landlords surveyed have had issues with tenants who don’t pay the rent on time

Nearly half (47%) of landlords surveyed have had issues with tenants who don’t pay the rent on time

Other key findings included:

  • Tenants breaking items and refusing to pay (26%)
  • Tenants refusing to leave at the end of their tenancy (16%)
  • Extra people living in the property who are not on the tenancy agreement (22%)

The latter could even put the landlord at risk of breaching Right to Rent provisions. This could include illegally operating a House in Multiple Occupation (HMO), or in some cases amount to a landlord being found guilty of a criminal offence following changes to the Immigration Act 2016.

Morris added: “Legislation is currently swinging towards tenants, at the risk of undermining the vital role played by private landlords in the UK housing market. Legislation such as the proposed deposit cap could make it even harder for private landlords to deal with challenging tenants, resulting in further pressures on landlords to sell up.

Whilst landlords selling their properties may appear to offer some short-term benefits for buyers, it cannot deal with the systemic problems surrounding the lack of housing supply. It will also reduce supply in the rental sector, which will increase demand and likely only increase pressures on the remaining landlords to increase rents.”

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©2018 Just Landlords

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