Upad, an online letting agency, has announced that it is now offering a new proprietary system to landlords which collects rental payments by direct debit. Rent Manager, the name of the new system from the agent, by using a method of collection controlled by direct debit, will provide assurance to landlords each month that the rent from their tenants will be paid according to schedule. The founder of Upad, James Davis, a landlord with a portfolio of property himself, explained that so many aspects of paying bills and living are already completed via direct debit, and he claims it is surprising that paying by direct debit has not already become standard within the rental market. If a mobile phone bill or utility bill is paid late, your services will be cut off. Any missed mortgage payments will eventually lead to repossession of the property. However, there is often an underlying assumption within the PRS sector that tenants being late with rental payments by a few days is acceptable, where it simply is not.
More than half of all landlords within the UK are paying a mortgage on at least some of their property portfolio, with all landlords relying on their income from rental properties to a lesser or greater extent. The fact that landlords cannot operate with total certainty that rental payments will be made every month is an issue which must be addressed. By using a direct debit system, the money is placed on hold three days in advance of the rental payment actually being made. This provides landlords with the assurance that they will receive their funds on time. Meanwhile, for the tenant, the risk of spending too much money on the approach to rent payment day is reduced. By paying rent via direct debit, these payments will also contribute to an improved credit rating for the tenant.
Mr Davis further added that there have been significant changes felt within the rental sector during the past few years, and now that regulation and rule changes are now mostly in place, focus has moved away from landlords. Upad is intending to change this. Landlords play a pivotal role in the housing market in the UK, and yet they are criticised much more than they are protected. Figures from the NLA (National Landlords Association) has discovered that 36 percent of landlords in the UK have experienced rent arrears over the past year alone. It is hoped that the provision of this direct debit facility will give assurance and power back into the hands of landlords.
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