Things are still uncertain in the lettings market, which is where a strong Rent Protection policy comes into play for the managed proposition of agents. Here's Maria Lloyd, Insurance Development Manager at Goodlord, to take us through some of the trends in the insurance and lettings space. Watch her video, or read on for her thoughts.
So, we're all getting busier. It's coming up to summer and everyone's ready for lockdown to end. So I'll start with some good news. In our March Rental Index, we've seen void periods hold steady at 21 days and rents have been up for the first time since July 2020 - even in London - and tenants' income has increased as well.
However, because the rents have increased and the income has increased, affordability is holding stable and we do still have some real uncertainty about the economy, moving forward. Landlords are still concerned about how they're going to protect their investment, especially after September when furlough ends - which of course may have a knock on effect for your agency's income.
We all know that furlough ends in September 2021, and it's important for everyone to understand that it also changes in June 2021, when the contribution from the government will drop to 60%, and it will need to be topped up to 80% by employers.
Some industries such as hospitality have been closed for a long time. You and your landlords need to understand the risk of what might come moving forward. Even if the tenant's income is stable currently, some sectors may not be in a position to employ people after this date, so we've seen a huge increase in appetite for rent protection over the last 12 months.
Even in the last six months, 86% of our agent customers who have joined Goodlord for our lettings platform have cited rent protection as one of their main goals. And, as you can imagine, with claims volumes increasing due to the stress on the economy, the landlord appetite for this is just growing and growing.
Recently, we took a poll on one of our webinars, which are all free for letting agents to attend. We asked agents how much of their portfolio was covered by rent protection and 30% of the customers that responded said that they didn't offer rent protection at all. From that same group of agents, 60% said that at least 5% of their tenants had been in arrears in the last six months. So there is a huge amount of risk still for landlords and letting agents alike.
We're also asked how long they think an eviction is going to take and 16% thought it was going to take more than 15 months to get a tenant out of a property. That's 15 months with that landlord not receiving any income - and you not getting your management fee either. That's a long time for your landlords to not get paid, when a Rent Protection policy is a nominal amount per month which can be factored into your management fees - giving your agency's full management service a boost.