Landlords should protect their investment property against inevitable rises in unemployment before it’s too late, say Homelet. They state that the release of the latest unemployment figures indicates that difficult times continue to loom for the UK economy, potentially affecting thousands of private landlords.

Whilst the overall unemployment figure dropped slightly in the three months to July, the number of people out of work and claiming benefits actually rose by 2,300 in August according to the Office for National Statistics (ONS)

Economists now fear that the UK’s labour market will be unable to sustain the inevitable government cuts which are due later in the year. There is renewed concern that previously safe jobs in the public sector will be slashed under next months spending review, meaning that even those in what were once considered stable jobs could find themselves out of work in the months to come.

In these difficult times HomeLet is urging landlords to consider safeguarding their rental income against their tenants becoming unemployed and unable to meet their rental payments, and to consider purchasing a rent protection insurance policy.

It has found that more tenants are now seeing their rented property as a home, rather than a stop gap, and average tenancies are now getting longer. This has led to there being less homes available for rent, but with more people looking for somewhere to live, in some towns and cities there can be six prospective tenants competing for each property. So landlords, it seems, can afford to be choosy when selecting a tenant. However, the company suggest that landlords to look beyond the reference and make steps to protect their rent as a reference is merely a view on how a tenant has behaved in the past, and it can’t predict how they will behave in the future.


Rents increasing yet again, say LSL

Landlords increased rents in August 2010 at the steepest rate since August last year, raising them by 1.4%, according to the latest Buy-to-Let Index from LSL Property Services. The latest rise means rents are the highest they have been since September 2008.

According to LSL, the average UK rent is now £686, 2.5% higher than the same time last year, following seven consecutive months of rises and an increase of 0.5% in July 2010. The average yield rose from 4.8% in July to 4.9% in August.

David Brown, commercial director of LSL Property Services plc, said: “Rents are jumping up as more and more potential home buyers opt to rent. People are wary of a crash in house prices and concerned over the effect of government cuts on their own ability to meet long-term financial commitments. Additionally, many people just can’t get a mortgage at an affordable rate.

“Furthermore, the huge number of reluctant landlords we saw renting out property last year have now had the opportunity to bank their gains and sell up and that’s cut into the supply of rental accommodation. All these factors have shifted the power back into the hands of landlords, driving up rents.

“With conditions still tough for first-time buyers in terms of getting finance, in the short to medium term, renting will continue to be the preferred option for many. We wouldn’t expect rents to move back down again until mortgage products become more attractive. Until this happens, landlords remain in a position of strength.”

Rent increases were led by landlords in the South East and London. In these areas average rent went up by 2.8% and 2% respectively, whereas landlords in the West Midlands and Wales found themselves forced to reduce rent by -1.5% and -1% respectively.

Brown said: “Summer often brings with it regional disparities and landlords in the South East and London this year were able to capitalise on the rising mercury, which can add seasonal value to their properties. Young people heading to university at around this time further energises the market as high demand puts upward pressure on prices.”