The latest Tenant Arrears Tracker from Your Move and Reeds Rains shows that the first quarter of 2015 saw the number of tenants owing more than two months’ rent up 4% on a year ago.
Currently 70,900 households face severe rent arrears, as of Q1 2015, up from 68,200 cases in Q1 2014
Eviction orders have also increased, with 28,900 facing losing their home, up 2.3% on the final quarter of 2014.
Despite a lack of progress on arrears since the end of 2013, the chance of a given tenant falling so far behind on rent is extremely low. As a proportion of all tenants, just 1.4% owed more than two months’ rent in Q1 2015, the same as in Q4 2014. This compares to 2.9% in Q1 2008 (twice the current proportion) even before the worst of the financial crisis and recession.
Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “Tenants are now far less likely to be out of work than at this point last year – a low-paid job is clearly better than no job at all, and this has had a massive effect on tenant finances as a whole. But the easy progress from a lower unemployment rate may now have been made.
“Earnings are a crunch point too. Many tenants are still struggling to keep up with household expenses in the face of extremely modest wages. There are some signs on the horizon this will improve, but in the meantime a small but significant minority of households are facing a real challenge to find the rent every month.
“Other factors are at play too. There are also more cases of severe arrears, in absolute terms, because there are more people renting their home overall. The chance of a given tenant failing to pay the rent within a couple of months is extremely low – and falling. The flipside to these figures are that more than 98% never get into serious arrears.”
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Our rent arrears are at only 2% of nearly 700 managed properties across 4 branches and showing no signs of increasing. Maybe this agent attracts the wrong types of tenants??
Michael its not a case of attracting the wrong type of tenants, I think its more a case of finances in the country as a whole and taken across the board (or it least it should be). Not every agent can have all the best paying tenants... I would also be careful at advocating 2% of arrears as being OK. Personally any type of arrears is unacceptable and on your own calculation at an average rent of £700, your arrears would be £9800. That is unacceptable and £9800 taken from a landlords investment. With costs to renting increasing through regulation and upgrades etc, there is NO EXCUSE for a acceptable level of rent arrears. There needs to be tougher consequences for rent arrears and also be made quicker to move people on if not paying. A landlord should not have to "foot the bill"
People need to learn how to manage their own finances. Simple as.
"a low-paid job is clearly better than no job at all, and this has had a massive effect on tenant finances as a whole"
Is it? If that job is so low-paid it has to be topped up with in-work benefits, I wouldn't say it was any better at all. Pay people more money - a living wage not a minimum wage - and people might be able to start paying their rent.
Also, what's not talked about much by landlords is how much rental prices have gone up in recent years. Increased demand, because people can't afford to buy, and not enough supply to meet this demand has pushed rental prices up considerably, particularly in London. In the capital you'll be paying at least £600 a month for somewhere that isn't a complete hovel - that's just insane. Even people with decent jobs would see a significant portion of their monthly income go straight out on rent. It's easy to see why people are disenfranchised with landlords, isn't it?
Obviously, there is good and bad on both sides, but I'm a bit fed up of landlords looking to heap all the blame on tenants. From people I know who own properties in socially deprived areas, their outlook doesn't tally with the outlook I read on here. This is the problem with the whole benefit scrounger rhetoric - it causes deep divisions.
@Graham Morris - nicely put!
@Algarve Investor - the increase in rents particularly in London is due to increased demand and decreased supply. Those - in turn - are due to the government's failure to build adequate levels of social housing while selling off existing housing stock and letting in hundred's of thousands of immigrants. But, of course, it's much easier to blame the landlords. I didn't hear anyone campaign to help landlords when the housing market crashed. Nor when interest rates sky-rocketed and hundreds of landlords went bankrupt due to the increased repayment costs. If I remember correctly, it was just the risk of doing business then. After all, everybody knows that your investment can cause loss as well as gain. Fair enough. Right now, our investment is gaining. So those who didn't raise a finger to assist when things were tough, can jolly well keep their views to themselves now.
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