In the first quarter of 2013 severe rent arrears rose by 4,000 to 94,000 and is the fourth highest figure on record, according to Paul Shamplina, founder of Landlord Action.
‘The highest level ever was recorded in the second half of last year, and over the last 14 years, our experience of professional bad tenants has been plentiful. Professional bad tenants will seek out someone new to the market who is self managing a property and who, out of desperation to avoid a void period, will accept a tenant with minimum referencing,’ he explained.
‘Some professional bad tenants will even entice a landlord to let to them by offering two to three months upfront rent instead of providing thorough referencing. They then will refuse to make any further payments,’ he added.
It is likely that as the number of arrears continues to rise there will be a bigger demand for information and 192.0m has launched the first ever Background Reports of UK residents which it believes will offer landlords instant and in depth profiles of potential tenants.
The reports detail negative financial indicators, residential history, property ownership, and neighbours’ contact details. Residential listings in the background reports will also display director’s records, and demographic profiles of neighbourhoods while insolvency records and county court judgements will reveal unpaid debts.
It comes as research from the firm reveals that one in five renters say they have sometimes or often concealed their real identity, 12% have lied about where they love and 10% are prepared to lie to make money.
Dominic Blackburn, product director of 192.com said that background reports are particularly important for the millions of new landlords entering the rental market. Figures from the Council of Mortgage Lenders shows that gross buy to let lending was 19% higher than the £13.8 billion advanced in 2011, reaching its highest level for four years. Some 1.5 million property investors held buy to let mortgages by the end of 2012.
Shamplina agrees. ‘Despite having no previous experience, many amateur landlords have tried to cut corners by not instructing a reputable letting agent and attempting to self manage their property. These landlords will be venerable to bad tenants who are often wise to the court procedures on eviction and will know how to play the system to delay proceedings,’ he pointed out.
According to Shamplina the rise in problem tenants is due to a growing buy to let market, and a stagnant economy. ‘A lack of affordable housing, with restricted funding in the mortgage market forcing more people to rent, combined with cuts to housing benefit, stagnant wages, and a rise in the cost of living and rising unemployment. The result is more problem tenants,’ he said.
He also pointed out that the so called bedroom tax and housing benefit reform will...
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