Landlords who fail to factor in inflation, interest rates, and pressure on household budgets when vetting tenants could end up with rent arrears, a property expert has warned.
The housing crisis and cost of living challenges means even previously reliable tenants can fall behind on payments, so landlords can’t rely on outdated, surface-level checks, according to Caroline Marshall-Roberts, (main image) CEO of property investment firm BuyAssociation.
She believes vetting matters more than ever and questions why rental payments don’t carry the same weight as mortgage payments. “In many cases, rent is just as high, sometimes higher, than monthly mortgage outgoings,” adds Marshall-Roberts.
“That’s why it is vital that landlords assess whether tenants can keep up with payments.
“That’s why it is vital that landlords assess whether tenants can keep up with payments.
“Failing to properly vet tenants can lead to costly consequences, from rent arrears to legal disputes and evictions. These issues bring legal fees and lost income, which can far outweigh the upfront cost of thorough checks.”
Tenant vetting should be seen as a risk mitigation tool, says Marshall-Roberts, who adds that early identification of financial vulnerabilities, through clear affordability checks and open communication, can help prevent situations from escalating. “In a climate of stagnant wages and rising living costs, landlords need smarter letting strategies, and that starts with better vetting.”
Rental payments don’t currently count towards credit scores, which is surprising given how substantial they can be, she says. New proposals by the government - reviewing Financial Conduct Authority lending rules that could allow a prospective buyer’s record of paying rent on time to show they can afford mortgage repayments - are currently being studied.
“If these proposals become law, they could help first-time buyers prove affordability and improve their chances of securing a mortgage.”
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