Number of tenants in arrears surges 20% in a yearMake Text Bigger
Thousands of tenants are in rent arrears with a growing number adding to the total every month, according to statistics from rent receivers.
Almost 95,000 tenants were at least two months behind with their rents in the quarter ending March 31 – an increase of 20% compared with 12 months ago and a 10.2% on the last three months of 2011, says Templeton LPA.
Landlords are also putting more possession cases before the courts, with the number of eviction orders granted up by 9% in a year.
As more tenants struggle with their rent, the firm predicts the number in serious arrears will top 100,000 by the end of June.
Director Paul Jardine said: “While the general tenant population has absorbed the rising cost of renting in the last two years, a minority of tenants are facing severe financial difficulties –a minority that is growing.
“These tenants have been pushed into deeper and deeper arrears by a combination of rising living costs, high rents and a weak labour market, and are now months behind with the rent cheque.
“In turn these severe rental arrears figures have been inflated by the ongoing impact of county court closures. The closures have prolonged arrears cases, with landlords less able to gain court dates to quickly remove non-paying tenants.”
The firm also warned that delays at court are increasing arrears as tenants who cannot pay are staying longer in their rented homes, which is impacting landlord and rent receiver cash flows.
“Despite the recent surge in severe arrears cases, overall tenant arrears have performed remarkably well given the challenging economic environment,” said Jardine.
“As we often see at this point in the year, more financially robust households are now paying down post-Christmas debt and putting their finances in order, which is helping to reduce the overall level of tenant arrears.”
Rent receivers are appointed by buy to let mortgage lenders to manage investment properties that are repossessed or where landlords have problems repaying loans.
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