LONDON - The rental market is on the move again. However, this is the time when landlords are most at risk from defaulting tenants as, although performance indicators, including housing, show upswings, unemployment is still expected to rise for the foreseeable future. This is the indicator that forecasts the moment of most risk of defaulting tenants.
The warning was issued this week by Let Insurance Services, the providers of specialist insurance against risks in the residential rental market.
Potentially, risks are likely to increase in the autumn, the traditional busy period for new lettings. This year, peak rental demand will be boosted by the disappearance of reluctant landlords from the market. Most sources believe these properties are going back onto the sales market.
“This is mostly good news as it helps to stabilise the current imbalance in supply and demand for rental property found in some areas of the country,” said Michael Portman, Managing Director of Let Insurance Services. “However, this is the moment when risk management is most crucial. Landlords, potential investors and their agents must take it seriously.”
There are two prime tools for risk management in the private rented sector, intelligent referencing systems to reduce the risk of defaulting tenants in the first place, and rental guarantees. These are available through many regulated letting agents.
Let Insurance Services, whose directors are all investment landlords and include the past Chairman of ARLA, the rental industry’s lead professional body, provides access to both of these weapons through recognised lettings agents.
“It is a popular perception that risk management is for large companies and businesses”, added Michael Portman. “Risk management is for all areas of life and most particularly if you are letting out your home or an investment property. Investing in Buy to Let is the area where more often than not individuals make the largest single investment in their savings and retirement portfolios.
A defaulting tenant can be an expensive proposition if there is no specialist insurance in place and a time consuming potential disaster that can be minimised by proper referencing in the first place.”
Source: Let Insurance Services
Media contact: Malcolm Harrison, +44(0)20-7581-8335
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