As we approach autumn, rent arrears are predicted to rise as uncertainty with soaring energy bills and fuel costs escalate the current cost-of-living crisis.
Rent guarantee service, RentGuarantor, has stated that it is experiencing increased demand as landlords turn to the guarantor option to widen the pool of potential tenants they would let and mitigate income loss risks.
A perfect storm of new legislation, tax on rental income and rising house prices have pushed landlords to sell up properties, further limiting tenants’ options within the market. Landlords are essential to the demanding rental sector. Landlords and increasing the housing stock are essential when it comes to meeting the current shortage in housing capacity.
The Rental Index Report from HomeLet and DataLoft echoed this sentiment as they found that 18% of all landlords surveyed expected to reduce their portfolio or leave the sector entirely in the short-term future–the figure rose to 22% for landlords based in London. What’s more, making the need for guarantors even more pressing is that the fear of falling into arrears is also shared by tenants, with new research from HomeLet finding that 78% of renters are worried about how they will pay their rent.
Paul Foy, CEO of RentGuarantor, comments: “The simple fact is that the rental market will not improve without more rental stock. For this to happen, we need to support landlords from external circumstances that may impact rental income. The role of a landlord must be once again seen as an attractive option, with less risk and more reward. It is just not sustainable for the market to continue the way it is now, where tenants are securing properties by offering up 12 months’ rent in advance, which is impossible for many tenants who may be struggling to make ends meet.
"Due to the effects of the cost-of-living crisis, the demand for guarantors is even more important and beneficial for landlords who are concerned with the possibility of rent arrears. The additional surety of no rent loss makes it more attractive for landlords to remain in or even enter the rental market.”
