According to research from Benham and Reeves, the average refurbishment budget for property damage from a rogue tenant is around £20,000, with average legal fees coming to £3,000 and lost rental income estimated at £11,820.
The cost of a rogue tenant is the steepest in London at £43,574, where rents are highest, followed by the South East with £36,578, the East at £35,186 and South West at ££34,526.
The research said the timeframe to evict a rogue tenant was around 51 weeks, with the largest delays coming from the Section 21 “no-fault” eviction notice period at 26 weeks and Covid-19 delaying court proceedings by 10 weeks.
During the pandemic the government extended the notice period for tenants from two to six months, and it now stands at four months. This meant landlords had to accept half a year of lost rental income during this time.
Benham and Reeves director Marc von Grundherr said: “Rogue tenants are a landlord’s worst nightmare and unfortunately this nightmare rarely ends when they are finally evicted. More often than not, the property is in severe disrepair when it is finally repossessed and this is sometimes done out of spite, or simply to strip the property of materials they can then sell on.
“What’s more, the landlord will have usually suffered arrears prior to starting the eviction process and is still required to make mortgage payments out of their own pocket during a period where their property is generating no income.”
He added: “Unfortunately, legislative changes in recent years and particularly during the pandemic have focused solely on the wellbeing of tenants and so the backbone of the UK rental market has been further weakened as landlords are left high and dry to pick up the pieces.”
Landlords need upfront checks and reserves
London and Country’s communications director David Hollingworth said the research underlined the eventualities that landlords had to consider when letting a property.
He added: “Ideally landlords will hope to avoid these, for example through a letting agent’s upfront checks and then by maintaining a good relationship with a good tenant.
“It’s certainly been true that landlords will see the value in holding onto a good tenant, so rather than upping the rental required they may hold steady for longer in recognition of the value in a solid tenant and landlord relationship.”
He added that landlords needed to be prepared and have reserves to draw on just in case of evictions or lost rental income.