The Intermediary – October 2025 - Flipbook - Page 39
BUY-TO-LET
Opinion
Crucial to securing
rent and growth
A
s the Renters’ Rights
Bill approaches Royal
Assent, leing agents
across England are
preparing for the
biggest change to
leings in 30 years. The Government’s
impact assessment estimates agents
could lose nearly £400m in revenue
over 10 years, largely due to tenants
staying in properties longer, while
the wider changes to the sector see
landlords collectively facing losses
of over £1.02bn during the same
period. But there is another threat to
rental income, the growing risk of
rent arrears.
Affordability pressures are
mounting. According to the Office
for National Statistics, (ONS) average
monthly rents in England reached
£1,403 in August, a 5.8% increase
year-on-year. Meanwhile, average
wage growth was lower at 4.7%. The
growing gap between tenants’ rent
and income makes them more likely
to fall behind, and under the new
legislation, landlords and agents can’t
act as quickly as today.
The Bill will abolish Section 21 ‘no
fault’ evictions. Currently, landlords
who need to recover a property for
Arrears management
must be embedded into
rental strategy”
unpaid rent can still serve a Section
21 eviction notice, but once the
Renters’ Rights Bill is enacted, an
arrears eviction notice can only be
served aer three full months of rent
arrears – and unless the tenant leaves,
landlords need to go through a full
court hearing.
With average court delays
already at 27.9 weeks from notice
to repossession, landlords could be
waiting six months or more to regain
possession, and may then need further
court action to recover missing rent.
What’s also clear is that deposits
won’t cover the shortfall. Generation
Rent’s Freedom of Information (FOI)
data shows the average deposit in
England and Wales is just £1,118,
less than one month’s rent in
most regions.
Arrears management
Against this backdrop, arrears
management must be embedded
into a rental strategy, starting before
the tenant moves in. We know from
Rightmove that on average 11 tenants
enquire per property, but not all
tenants are equal.
Our tenant referencing strategic
partners HomeLet and Let Alliance,
who together operate one of the UK’s
biggest tenant referencing services for
agents and landlords, identify more
than 150 potential fraud cases daily.
Without robust checks, these tenants
could end up in your properties,
and potentially in arrears. Finding
and placing the right tenant is your
first step.
Check daily
Once a tenancy begins, early arrears
intervention becomes critical. If a
landlord only checks rent payments
monthly, they could miss weeks when
they could help those tenants address
their arrears.
Bank-integrated rent payment
platforms like PayProp help agents
keep their finger on the pulse. Linked
to your bank account, such tools can
automatically flag who has paid and
who hasn’t, allowing you to monitor
arrears 24/7 and, when alerted, to
send reminders by email or text, in
just a few clicks.
The stats really speak for
themselves. We looked at the top 10%
of PayProp-powered agencies with
the lowest arrears. In September,
they had fewer than 1.4 tenants in
DR NEIL COBBOLD
is commercial director at Reapit
arrears per agency, owing just £513
on average – less than 39% of average
monthly rent. This limits the impact
of arrears on income and gives great
data points agents can use to sell their
service to prospective landlords.
While correlation alone doesn’t prove
causation, it is striking, to say the
least, that the same 10% of agencies
also grew their leings commission
income by over 13% in the past year.
Protection can pay
Even the best processes can’t prevent
every case of arrears. That’s why
some landlords and agents are
turning to rent guarantee insurance.
The most comprehensive policies
don’t just protect landlords from
lost rent; they also safeguard leing
agencies from the financial impact of
prolonged arrears.
While no one wants to rely on an
insurance claim, it does provide the
assurance if things go wrong. Property
professionals could soon face over
six months of unpaid rent if a tenant
defaults and eviction proceedings are
delayed. That missing income might
be a lifeline – a mortgage payment
or a pension. Knowing you won’t be
le out of pocket can make all the
difference, not just financially, but
in building trust with prospective
landlords, maintaining trust with
your current clients, and stability
within an agency.
The Renters’ Rights Bill is a wakeup call. The changes mean landlords
and agents need to refocus and put
arrears management at the heart of
how they operate. With the right
tools, property professionals can take
control by veing tenants thoroughly,
acting early on arrears, and puing
insurance in place. They will be the
ones best placed to grow under the
Renters’ Rights Bill. ●
October 2025 | The Intermediary
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