Landlords in the UK are reporting that the incidence of void periods are falling, which is good news for the wider private rented sector.
It isn’t just the incidence of voids that are decreasing, indeed the duration of the average void period is falling too, according to research by BDRC Continental commissioned by Paragon Mortgages.
Some 34% of landlords said they had experienced at least one void period in the last quarter of 2013 compared with 36% in the third quarter. The average duration of a void period was 59 days in the final quarter of 2013 compared to 64 days in the third quarter and 69 days in the second quarter.
Landlords were also asked, where they had experienced a void, how they cover the financial impact. Those small scale landlords with only one property were more likely to cover any shortfall using either their own savings (17%) or from other income (19%).
A quarter of all landlords said they would cover it with rental income from other properties, 10% would look to absorb it and 16% would use cash reserves that had built up whilst the property was occupied.
‘It is good to see that void periods are less frequent and getting shorter. What is also important to note is the resilience of landlords when coping with a shortfall of income on an individual property, this provides further insight into just why the credit quality of buy to let lending is so much better than regular mortgages,’ said John Heron, director of mortgages at Paragon.
The same research revealed that landlords experienced a reduction in the level of tenant arrears in the fourth quarter of 2013. The average number of tenants in arrears remained low at around two against a portfolio size of 11 properties.
Of those landlords surveyed, 28% of landlords said that they were concerned about rental arrears in the next 12 months.
In terms of other areas of concern for landlords, 31% said that they had property which had been damaged by tenants and 15% had problems with anti-social behaviour.
The survey also shows that landlords are more secure financially with just 1% of landlords saying that they had missed a buy to let mortgage repayment in the fourth quarter of 2013.