In a survey of 1,000 landlords for the BDRC Continental Landlord Panel, 34% of respondents said they had at least one void period in the final quarter of 2013.
That's down from 36% in the third quarter.
In addition, the average duration that a void period lasts for is also dropping and is now at 59 days in the final quarter of last year. To put that into perspective, in the third quarter, the void period was 64 days and in the second quarter of 2013, it was 69 days.
How to prepare for the void period
Those landlords taking part in the survey were also asked how they covered the shortfall during a void period.
Landlords with just one property were the most likely to pay for the void by dipping into their savings with 17% of respondents doing so, whereas another 19% said they used 'other income' to fund the shortfall.
A quarter of respondents said they covered the void period using rental income from their other properties, though 10% said they would absorb the loss over the year and 16% said they would use their cash reserves that had built-up when the property had been occupied.
John Heron, a director of Paragon Mortgages who commissioned the survey, said it was a good sign that these void periods being experienced by landlords in the private rental sector were not only becoming shorter but also less frequent.
He added: “Landlords are resilient when coping with an income shortfall on a property and it's also an insight into why the credit quality for buy-to-let lending is better than that for regular mortgages.”
Landlords don't factor in financial impact of voids
Meanwhile, the National Landlords Association has carried out another survey which reveals that most landlords, around 90%, say they do not factor in the potential financial impact of voids when letting a property.
The NLA says that this result illustrates the fact that most landlords do not have a business plan in place for when they start a letting career which would help to prepare them for the drop in income.
The association's chairman, Carolyn Uphill, said: “Prospective landlords should not underestimate what they are getting into because being a landlord is a business and you need to plan for the future to avoid the pitfalls which avoids are.”
The NLA says it is good practice for a landlord to budget for an income of ten months of rent in a year to help prepare for an unexpected void period.
