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Tenants warned about rent arrears in run-up to Christmas

From Property Talk Live on November 29, 2013

Landlord Assist is urging tenants to be careful with their festive spending to ensure they have enough money left to maintain their rent payments. 

The nationwide tenant referencing and rent collection company says that rental arrears commonly peak in the months before and after Christmas as many tenants are tempted to overstretch their budget during the festive period and are left picking up the bill in the New Year.   Graham Kinnear, Managing Director at Landlord Assist says that many households are already feeling the strain of rising living costs, stagnating wages and record rent levels. He says that the additional strain of Christmas could leave many tenants’ finances stretched to the limit.   Subsequently he is warning tenants to budget carefully for Christmas and not to sacrifice their rental obligations simply to cover the cost.

He says: “December is a time when we see people’s budgeting priorities change, with people keen to spend money on gifts for family and friends.

“Christmas is an expensive time of year and many people feel pressured to spend money they simply don’t have, with many also tempted to use credit cards and payday loans to cover the cost.

“In some instances this leads to an inability to meet their rental obligations and puts tenants in an unenviable position of facing arrears in the New Year. We urge tenants to budget carefully for Christmas and not risk to their homes by slipping into arrears with their landlords.”

The impact of tenants falling into arrears at Christmas time should not be underestimated, as it can also directly affect a landlord’s ability to maintain their mortgage payments too.   With many landlords relying on a tenant’s rent to supplement their monthly income it is clear that some would be unable to pay the mortgage on their property in the event that the tenant missed a payment of rent.

Stephen Parry, Commercial Director at Landlord Assist adds “Given the inability of some landlords to meet mortgage payments without the rent, we are worried about the demands that Christmas places on people.

“If tenants are finding it tough they should not be afraid to explain to their families if they are working on a restricted budget this year. It is surely better to have a roof over your head and be without the worry of rent arrears than to overspend on gifts and socialising with friends, which are likely to be forgotten by the New Year.”

“Wherever possible, landlords should have a reserve fund available to them to cover mortgage payments during periods of non-payment or voids as well as unforeseen repairs which need to be carried out in the property. Those who are reliant on the rent to pay the mortgage each and every month are arguably spreading themselves very thinly.”

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Source: Property Talk Live