More tenants in arrears as rents keep risingMake Text Bigger
Around 75,000 buy to let tenants are in rent arrears – a 13% increase on the same period last year, according to rent receivers appointed by mortgage lenders.
The number of tenants failing to pay rent went up from 71,483 in the first three months of 2011 to 74,492 in the second quarter – a 4% rise.
Tenants who do not pay their way are also finding landlords are taking a tougher approach to arrears as court orders for evictions has gone up 9% year-on-year.
Landlords are managing to handle the income deficit as mortgage lenders report loan arrears have dropped by 12% in the year.
“Tenant finances are under pressure. Rents have risen consistently to a record high and the cost of living is taking its toll. Many tenants on lower incomes are falling behind with monthly payments,” said Paul Jardine, director and receiver at Templeton LPA, the firm conducting the research.
Jardine also praised landlords for demonstrating improved cash flow management.
“Tenant finances will continue to be placed under pressure, and it is crucial that landlords do not delay in contacting tenants to nip any potential payment problems in the bud as amicably as possible. Otherwise, buy-to-let mortgage arrears will begin to climb as the year progresses.”
Letting agents are seeing home movers playing the markets by offering their properties for sale and rent, says Countrywide, on of the UK’s largest private home rental networks.
The firm saw numbers of new tenants seeking property soar by 20% in May, a 28% increase over May 2010. Stocks of properties for rent also increased by 15.5% from April to May.
Chief executive Grenville Turner said: “The hesitant sales market has an increasing number of homeowners considering dual marketing their properties in the sales and the rental market to see the greatest financial value.”
A separate study by mortgage lender Paragon shows many landlords have seen rent income increase during the second quarter of 2011.
Around 13% have put up rents by by between 2% and 4%, while 4% increased rents by up to 6%.
Chief executive Nigel Terrington said: “Landlords with high demand have increased rents without making accommodation unaffordable.
“Demand for privately rented property shows no sign of slowing down with 40% of landlords believing tenant demand is either growing or booming, and will continue to do so for the next 12 months.”
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