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.”