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How proptech can help mitigate rent arrears


Avoid rent arrears with CubicLease
In May ~300,00 tenants were behind on their payments. Landlords and agents may have to borrow an idea or two on how to circumvent challenges in the rental market.

What do General Electric, IBM, Microsoft, and WhatsApp have in common? Yes, they are American companies that boasted revenues of $50 billion-plus in 2019.


For businesses that are trying to make their way through the crisis as best they can, innovation is needed – the property sector included.


Recent news shows that as people’s economic situations have changed; landlords and estate agents are bearing the brunt; according to Goodlord, 300,000 tenants were behind on their payments in May. Other challenges presented by Covid-19, like social distancing, have made it harder to show and move properties.


hundreds of thousands of UK workers becoming unemployed as a direct result of Covid-19 and many others facing dramatic pay cuts.

To make it through the next few months, landlords and agents may have to borrow an idea or two on how to circumvent challenges in the rental market by looking at safeguards already in place in the mortgage market - namely affordability checks.


PropTech can quickly carry out affordability checks thanks to Open Banking and it may also be a solution to issues surrounding social distancing, with successful companies like Airbnb already facilitating secure and transparent private access to short-term rental properties via technology.


landlords and agents are at risk of having tenants’ default on their payments. Affordability checks is a good safeguarding tool.

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With hundreds of thousands of UK workers becoming unemployed as a direct result of Covid-19 and many others facing dramatic pay cuts, landlords and agents are at risk of having tenants’ default on their payments. Affordability checks seem like a reliable tool for safeguarding.


They exist in the mortgage market and car financing market but are surprisingly not required in the rental market – where it is on average 1.25 times more expensive to rent a property per month than pay a mortgage.


In fact, one would argue they should have existed prior to the pandemic, with the 2018 English Housing Survey showing that 51% of private renters do not find paying rent fairly easy. Of those surveyed, 9% said it was very difficult, 4% were in arrears and 5% had been in arrears in the past year.

Prior to the introduction of affordability calculations on the UK mortgage market, around 7% of all mortgages were in arrears. This figure has fallen to 1% in 10 years since these checks were put in place.


Affordability differs from a referencing check because it considers the current income and expenditure of an individual and assesses if a potential tenant has the capacity to meet their monthly financial commitments. Whereas, reference checks just look at previous CCJ, IVAs, credit scores, and bankruptcy and do not take a renter’s current financial circumstances into consideration.


Enter technology

Affordability checks are easy to do with Open Banking, allowing PropTech apps access to data through more transparent banking options – this inevitably requires the industry to embrace technology.

It’s not a secret that the UK has been slow to adopt PropTech; a 2018 KPMG report asked if the real estate industry is “all talk and no action” when it comes to utilising new technologies. While the British Property Foundation has said the UK could be a global PropTech leader but needs real estate agents on board.


Now more than ever, technology can help those struggling in the industry get ahead. Since launching CubicLease on June 22, we have been inundated with queries from estate agents and landlords who require a robust system to vet prospects.


CubicLease’s platform has partnered with all the major UK banks and challengers to carry out reliable affordability checks.

Not only does these checks prevent things from getting complicated when a tenant cannot make the rent, but it saves landlords and estate agents money in the short-term too.

Our technology enables affordability tests to take place prior to a potential tenant viewing a property – which means less time is spent by the landlord or estate agent. It is estimated that a letting agent on average shows one property seven times before it’s successfully let.


By vetting people beforehand, you can help to reduce that ratio, saving time and money. With a cost of over £25 per property viewing when you factor in all the associated costs, these figures rack up over time; the letting of just one property can cost an agent at least £195.



Once a landlord or agent signs up with CubicLease, their property is added to our platform. They receive a verify link to their property – which can be shared on social media or on sites like Gumtree.

So, at this pivotal time in the history of the UK property sector, will you be an IBM or that other company we used to use that no one can remember the name of?

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Cubic Lease Limited is a registered company in England, Reg. No. 12243866.
Registered address: Fifth Floor, 63-66 Hatton Garden, London, United Kingdom, EC1N 8LE.

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