Research released has shown that basic checks are not giving private landlords enough background information on the tenant to protect them from rent arrears, tenancy issues and possible claims on their landlord insurance policy.
Landlords purchasing a basic tenant check often only receive information that will just verify that the tenant is who they say they are as well as highlighting any previous problems on the tenant’s history. However, research shows this is not always enough and rogue tenants find slipping the net quite easy. For example, 7.1% of tenants in October were found to have one or more County Court Judgement recorded at an undisclosed address. Checks also found that 27% of self-employed tenants were not able to provide tax returns or acceptable proof of income and 8% had provided false employment details on the application form. Because of this landlords need to undertake more scrupulous checking of their tenants to protect both their investment and income streams.
Paul Sessford, an insurance expert, said “In much the same way mortgage lenders have become more stringent with their lending to ensure borrowers are able to meet repayments, landlords should act in a similar fashion to ensure that the tenant can meet their obligations. High unemployment and stagnant wages are making conditions particularly tough on those having to rent. With rent in many areas at peak levels it makes no business sense for a landlord to rely on an income from someone who is not financially stable.”
There is no guarantee that thoroughly screening a potential tenant will mean there will never be any problems but it should be the starting point for all private landlords. Tenant arrears and unexpected maintenance charges are just two of the many things that are costing UK landlords over 2 billion each year and 86% of landlords receive less money than they thought from their monthly rental income due to these unwanted costs.