The number of tenants seriously behind on rent has risen by 13.8% to reach the highest level in more than two years, new figures show.
According to the latest tenant arrears tracker by estate agency chains Your Move and Reeds Rains, there were 84,200 tenants owing more than two months’ rent at the end of September, compared to 74,000 at the end of June.
This means there are now 13,200 more households in significant arrears than the previous year, an annual increase of 18.6% since 2014.
Despite the increase, Your Move and Reeds Rains said the latest deterioration in tenant arrears was “relatively mild” and considerably below the record 116,600 cases seen at the end of September in 2012.
Adrian Gill, director of Your Move and Reeds Rains, said: “The chance of an individual 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.”
The survey showed that eviction rates have yet to mirror the higher levels of serious rent arrears.
At the end of September there were a total of 26,712 court orders for the eviction of tenants, 4.3% lower than was seen in the previous quarter.
Landlord finances also stabilised with lower arrears than in 2007. For the three months to the end of September, there were 5,700 cases of buy-to-let mortgage arrears, the same level as was seen in the previous quarter. This represents less than half the 12,500 cases of buy-to-let mortgage arrears from the previous year.
Gill said: “Landlords and buy-to-let lending have been targeted from a variety of angles in 2015 – under a harsh political spotlight, subject to new taxes and freshly scrutinised by regulators. There could be a real debate about the role of landlords, and indeed the urgent need for more investment to keep up for demand for homes to rent. However this should be done constructively – and any worriers about the financial health of landlords should consider the reality of buy-to-let mortgage arrears at record lows.
“In the context of resurgent tenant arrears, landlords are the buffer delaying a parallel peak in evictions. And healthy landlord finances make that tolerant approach more likely. So while penalising landlords may win easy political points, making investment in new homes to let harder could be counterproductive – especially in the face of new challenges.”
