The UK has seen quite a steep difference of pace between the rate of growth of rental costs for private property tenants , up 60% over the last 10 years, as compared to gross income which has only gone up by 31% over the same decade. The pressure to pay rent is at a fast growing high, along with the need to pay for all other expenses, and according to recent data from Shelter, 1.4 million Britons are falling behind with their rent or mortgage payments.
In 2012 alone, the number of those having difficulties in making their monthly rent or mortgage payments increased by 44%, meaning 7.8 million people are currently in this situation. Shelter research also showed that about a million people used a payday loan to help pay their rent or mortgage in 2012, another 2.8 million people using unauthorised overdrafts to come up with the money for payments, of which 10% used this method every month.
‘These uncomfortable statistics highlight the need for letting agents and landlords to carry out thorough checks on applicants when letting a property to ensure that they can afford to pay the rent,’ said Michael Portman, managing director of specialist risk management and insurance company LetRisks. ‘Times are very tough for many tenants and demand for rental accommodation is on a sharp increase. Landlords and letting agents need to extra vigilant when they take on a new tenant. But a few simple checks will help identify if a tenant is in a good financial position or not.’
As a result of this situation, landlords and agents need to pay more attention to they way they review potential tenants, doing credit and background checks before closing any deals, or even asking for references from previous landlords.