Some of the countries leading estate agency chains Tenant Arrears Tracker has reported that the number of tenants seriously behind on rent has risen by 13.8% on a quarterly basis.
A staggering 84,200 tenants are more than two months behind with paying their rent, as of Q3 2015, compared to 74,000 in Q2. This shows an increase from one quarter to the next of 10,200 additional households in potentially serious financial difficulties. Looking at this annually, 18.6% (13,200) more households are in significant arrears than a year ago when this figure previously stood at 71,000 across the UK.
Historically these latest figures are still relatively low where serious tenant arrears are concerned , remaining below the record of 116,600 tenants in this situation in Q3 of 2012. However the latest figures for Q3 2015 are still the highest levels we have seen in more than two years.
This dramatic increase in numbers is due to the growth of private rented sector across the UK.
A director of leading estate agents Your Move and Reeds Rains explained. “The chance of an individ
ual tenant falling into serious arrears remains very low. In general, renting works for most people. Over the last decade the private rented sector has expanded at an unprecedented pace, providing homes for millions of households at the same time as absorbing the worst financial crisis in living memory.
In the current climate, optimism feels increasingly reasonable. Most households are beginning to earn more, the cost of living is stable and the chance of falling into unemployment is diminishing. For the majority of tenants, paying the rent is becoming easier rather than harder. But beneath this rising tide there are inevitably some households and individuals who are not yet feeling any new economic buoyancy. As others bid rents higher there will be a minority who are still struggling to keep up. Landlords and tenants have a mutual responsibility to be aware of this small but significant risk.”
To many this issue can be sourced back to the increasing legislations imposed on landlords by the government, with fines for landlords and letting agents supplying properties below expected standards, increased stamp duty taxes, and tightening of mortgage criteria; private sector landlords are being hit hard and yes, forcing them to either sell up or increase rents – in turn this will only effect tenants more as rents go up and options on housing become slimmer only adding to the problem of affordable housing and rent arrears! What are your thoughts?
Here at CXG we always recommend that our landlords take out rent guarantee insurance.