New 'rent on time' products available to brokers

From this morning, a company that guarantees rental payments to landlords on the day rent is due, will make its products available to intermediaries.

Rent on Time guarantees rental payments when due, even if the tenant makes a late payment or defaults. The cost to landlords is 6% of rent and a one-off £100 administration fee per property.

Previously the scheme was only sold to landlords directly, but it will now also be available via mortgage brokers, IFAs, estate agents and insurance brokers.

Brokers will earn commission worth 1% of the rental income guaranteed on every property they introduce. With average rent hitting £686 a month, a broker introducing 50 buy-to-let properties could earn £4,116 commission a year.

Rent on Time’s launch to the intermediary market follows an initial trial with Mortgages for Business.

Paul Pearce, business development director at Rent on Time, said: “Rents are up, and yields came close to touching 5% in August. More landlords are being tempted back into the market. But soaring arrears will be the real driver behind this product’s success.”
 
The number of tenants in arrears across England & Wales is increasing dramatically. According to property services group LSL, in August, approximately £266m worth of rent was outstanding – 11.3% of the nation’s monthly rent. This was up 25% on July.

The rise in arrears is the result of soaring rents (up for the seventh month in a row in August) and deteriorating economic conditions.

Pearce said: “Rent on Time will pay the rent when landlords expect it. We will also deal with all disputes or eviction processes, so landlords don’t have to worry about collecting money from tenants or missed payments – they can get on with managing their portfolios successfully. 

“And as it is not based on an insurance model, landlords don’t have to make a claim, pay any excess, or wait for their claim to be accepted – or declined. It should prove very popular with landlords.   

He added: “Now that the mortgage market is so constrained, the additional income the service will bring intermediaries should prove very welcome. In fact, we hope to sign up a large long-established financial services network very shortly.”