Are you financially prepared for void periods?
Despite a flurry of first time buyer activity, demand continues to outweigh supply in the private rental market.
That said, when a tenant leaves, a landlord can often be left with an empty property if only for a few weeks or even a month. During that time the landlord is responsible for all overheads from utility bills to council tax and, of course, the mortgage previously subsidised by the rental income.
The good news is void periods have fallen 5% since the last quarter. However 33% of landlords have still found themselves with vacant properties.
Landlords with properties in the North East of England have suffered the most; almost double the average (60%) encountering void periods in the last three months while only 20% landlords in the South West have had to deal with empty properties.
But latest research by the National Landlords Association (NLA) has revealed that the majority of void periods are unplanned and therefore come as a surprise to landlords.
As a result landlords covered these costs by:
- 33% using rent from other properties
- 10% using other salary/income
- 9% using funds from their savings.
“Void periods are part and parcel of letting property and are something every landlord must account for,” comments solicitor and Head of GW LET, Rob Denman. “By law, landlords must cover any costs associated with the property and should therefore budget accordingly to avoid leaving themselves short.
“As always communication between a landlord and their tenants is key to minimise the length of time a property sits empty. Landlords should speak openly to their tenants about a month or so before the tenancy is set to end to find out whether they would like to stay in the property instead of waiting for the time to lapse. That way there is sufficient time to re-market the property and find new tenants.”
Content correct at time of publication