Finding cheap landlord insurance deals could be a sensible move for buy-to-let property owners in the current financial climate, it has been suggested.
With demand for rented accommodation soaring landlords are currently enjoying ever increasing rental yields.
However, this is also having the effect of increasing the number of tenants who fall into arrears with a recent report from the charity National Debtline revealing an 84 per cent rise in the number of people seeking help with rent arrears over the past four years.
Commenting on the report, Graham Kinnear, managing director tenant eviction and referencing firm Landlord Assist, urged owners of buy-to-let properties to take steps to protect themselves from the risk of arrears, including taking out landlord property insurance.
"Although no landlord can predict a tenant falling on hard times, performing credit checks at the start of an agreement can help landlords to assess the tenant's ability to pay the rent," he said.
"Landlords should also consider rent guarantee insurance policies to protect their income should a tenant fail to pay on time."
According to Mr Kinnear landlords must take swift action against tenants who fall into arrears as the situation is very unlikely to improve on its own.
"Landlords should take early action and seek professional advice if their tenants default on payments. Arrears situations rarely rectify themselves and in the current economic climate landlords need to protect their interests," he said.
He also suggested that landlords who invest in smaller properties could be set to benefit from increasing financial pressure on tenants.
"The economic situation is really impacting now. We are referencing tenants who are wanting to trade to smaller properties as they are no longer able to afford their rent," said Mr Kinnear.
It follows a survey by Paragon Mortgages which found that landlords saw average rents increase for a third quarter in a row between July and September this year.â€¨â€¨