Landlord rent arrears fall to record low

While growing numbers of landlords may be seeing fewer rent arrears, the problem is still causing issues for those with bigger portfolios.

Pegasus Insight’s latest Landlord Trends research found 26% of landlords had experienced arrears during the past year, the lowest figure recorded since tracking began and down from 42% in 2020.

There was a slight increase in the first quarter of this year, before arrears fell back again in the second quarter.

The gap by portfolio size shows 66% of landlords who own 11 or more properties seeing rent arrears, compared with 18% of those with between one and 10.

Larger landlords face arrears

A director of the firm, Bethan Cooke, said: “Larger portfolio landlords remain much more exposed to arrears, while voids continue to affect four in 10 landlords.

“Our tenant research also shows that most renters are continuing to meet their housing costs, but many household budgets remain stretched.”

She added: “With inflationary pressures persisting and landlords facing higher operating and regulatory costs, the position remains finely balanced.

“The priority now should be to avoid adding further pressures that could ultimately feed through into rents or reduce the supply of homes available to tenants.”

Tenant payment pressures

Separate Tenant Trends research from Pegasus Insight, based on 3,000 interviews with private renters, found 12% had missed a rent payment during the previous year.

Around nine in 10 tenants described their rent as either manageable or comfortable.

The research also found a significant minority were having to choose between paying rent and other essential household costs.

The firm said arrears have been easing gradually since reaching their highest level during the pandemic period.

Landlord voids remain high

Voids lasting more than seven days were experienced by 41% of landlords during the past 12 months.

Those empty periods lasted an average of 66 days.

Among landlords with 11 or more properties, 68% reported a void, compared with 35% of those with smaller portfolios.

HMO operators were also more likely to experience void periods, according to the research.