With the current economic climate and the latest Covid related lockdown, tenants paying rent late or accumulating rental arrears are an increasing problem. Even before we had heard of Covid 19, students have been facing increased rental prices along with student loans remaining static. This has pushed many to rely on help from family members or find part-time or full-time employment alongside their studies. Events over the last year have served to add to this problem with family members often unable to help due to increased financial constraints and a reduction in the number of jobs available to students, such as bars, restaurants, and shops being some of the hardest hit by the crisis.
We always ask students to either provide a guarantor or pay money upfront to try and avoid rental arrears accumulating. However, this cannot always prevent late rental payments as we are required to wait a period of time before we can request payment from guarantors, as well as provide a period of time to arrange the payment.
Due to students depending on loans we can predict the times of the year where we expect to see increased late rent, or arrears and plan as required. Unsurprisingly as the dates loans are due often don’t match up with rent due dates and we see a lot of tenants asking to pay rent later when they receive these loans. The loans come in 3 parts and are received usually in late September, early January, and mid-April, in line with the course dates, so always plan to have the finances in place to cover any mortgage payments or other expenses, that may depend on monthly rent payments.
The other key period, especially if the tenants are on an 11/12 month contract is over the summer, particularly July & August. Loans are not calculated to cover this period, so students rely even more heavily on family or working to cover this rent. With the issues around Covid I previously stated, we are expecting an increase in delayed rent this coming summer. So once again plan to have the finances in place to cover any financial commitments you may have during this period if rent is late or short.
Fortunately, we are still finding most tenants are paying the rent as normal or contacting us regarding any deferments or other arrangements they may require. It is however always good to have a backup plan in case the tenants are unable to pay and hope this helps in making them.