Ensuring tenants pay their rent on time every month is extremely important for landlords, and so when they first set up a Tenancy Agreement they usually specify when and how their tenants can pay their rent. Landlords who offer long-term tenancies usually ask for their tenants to pay them each month by direct debit so that they know the money will be deposited in their bank on a certain day each and every month. This knowledge is extremely helpful when planning budgeting and making sure outgoings such as mortgage and landlord insurance payments are made on time.
However, some landlords are finding that with the introduction of Universal Credit most of their tenants who are eligible for housing benefits will soon receive their payments on different days, meaning that there have been concerns that their tenants could spend this money before the direct debit comes out of their account. In order to combat this problem some landlords have already looked to new payment methods such as allpay which allows direct debits to be paid any day of the month.
Now allpay are planning new ways to help tenants pay their rent on time and have recently claimed that by 2017 between forty and sixty per cent of all tenants in the UK will be able to pay their rent using their mobiles due to a new app that they are currently developing. The company has also recently conducted a survey which has shown that ninety per cent of landlords believe that arrears will increase by 2017, with another sixty per cent saying that they believe door to door collection of rent will have to be implemented in the future in order to combat missed payments.
Discussing the survey, allpay’s business development director Nick Peplow said: “The survey has been useful to gauge the views of landlords ahead of Universal Credit – which could radically alter the way low-income households budget and pay their bills. The results emphasise the importance for landlords to offer a wide range of payment options and that with the increased support and advice being offered to them by landlords, local authorities, charities and other organisations, more will be comfortable using automated payment channels like a direct debit.”
We are sure that in the future many other companies will also start looking at new ways for tenants to pay their rent each month, which will hopefully alleviate rent payments and make it easier for landlords to run their businesses efficiently and in the knowledge that they have a secure income each and every month.