How long could you finance your BTL if your tenants stopped paying?
With figures coming out over the weekend of the average time it takes to regain possession of property through a court order, is it any wonder we have such a low buy to let market with article after article of how landlords are losing out?
The differences vary region by region, with the current average in England being 22 weeks, although the government have been releasing figures of 16.1 weeks – nearly a 6 week difference.
The figures were looked into following a parliamentary question from MP Kevin Hollinrake, who asked what the median and mean times were for private landlords to progress from a claim to possession of a property by a county court bailiff in England. This found that London had the longest amount of time for possession of 25 weeks, and the lowest in the South West of 18.1 weeks, a huge difference, but neither close to the government figure of 16.1 weeks.
It raises the question for all landlords, are you covering yourself in the event your tenants are unable to pay their rent? With companies going into administration, universal credit proving to have caused issues and couples splitting, anything could cause your tenants to have problems paying their rent on time or even at all. Even with the very best referenced tenants, factors can change so quickly to affect the ability to pay rent. Being in the industry, I recommend every single landlord I meet to have some sort of rent guarantee insurance and legal cover to protect them. I believe a landlord should always view their buy to let as a business, if I said to a business owner, here is an insurance that will always ensure you are in profit, it’s a no brainer they would take the insurance out. Yet I still have so many landlords who are happy to risk it.
With the new figures of the average length of time for possession, and the average UK rent of £928 this could mean landlords are out of pocket by £5353.75 without taking into consideration court costs and any potential damages. Realistically if a landlord did have this in savings, would you really want to lose this amount rather than paying around £150 a year for an insurance policy?
Even if you are like most landlords and will never have an issue like this, isn’t it best to have yourself protected in case anything happens? I know I would.