According to the latest Tenant Arrears Tracker, the number of tenants seriously behind on rent has risen by 13.8% on a quarterly basis.
There are now 84,200 tenants more than two months behind with paying their rent, as of Q3 2015, compared to 74,000 in the second quarter. In absolute terms this represents a quarterly increase of 10,200 additional households in potentially serious financial difficulties. On an annual basis, this means 13,200 more households are in significant arrears than a year ago, or an annual increase of 18.6% since Q3 2014, when this figure previously stood at 71,000 across the UK.
On a historical basis, the latest deterioration in serious tenant arrears remains relatively mild, remaining considerably below the record 116,600 such cases seen in Q3 2012. However the latest figures for Q3 2015 represent the highest levels in more than two years.
In part, the increase in absolute numbers of serious arrears due to the overall growth in the size of the UK private rented sector. As a proportion of all private tenancies, just 1.6% are in serious arrears of more than two months, as of Q3 2015. This compares to a peak proportion of 2.9% of tenants in Q1 2008. However this proportion has also increased marginally from 1.4% in serious arrears as of Q2 2015.
Mike Keywood, Director of Belvoir Mansfield, comments: “Looking at our North Nottinghamshire portfolio today, tenants in rent arrears are currently below 1%. Comparing this to the shocking figures above it illustrates how particular areas may not be feeling the new economic buoyancy, and tenants are struggling to keep up with rising rents.
But how do you prevent rent arrears? There are many ways, but you cannot predict human behaviour and we forget that it can be down to personal and relationship breakdowns, not their employment. In the main, it is a question of priorities and with good advice, support and communication, all, if not most cases of arrears are completely avoidable. However, as it is not always the case with these things, it would be wise to invest into an insurance product that covers rental arrears and possible court action, such as a guaranteed rent scheme or loss of rent cover plus legal expenses.”
Source: Property Reporter
