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Posted on June 15th 2016 by admin-movingin

Serious rent arrears drop four per cent thanks to higher employment rate

Original Author: Graham Norwood

There were 3,100 fewer private rental households in serious rent arrears in the first quarter of this year compared to the last three months of 2015 – that’s a drop of four per cent.

Eviction orders were also down, by three per cent, and represented only one third of the tenants described as in serious arrears.

Overall some 86,200 tenant households were in serious arrears, defined as more than two months behind with their rent. This is just one per cent of all private rental sector households. 

Landlords are also showing improved finances, with the smallest number of buy to let mortgage arrears since 2007.

All this data, produced by LSL Property Services’ Your Move and Reeds Rain brands, suggest that wider economic factors are relatively strong. 

“Fewer tenants in serious arrears reflect the health of the jobs market.  With an extra 44,000 jobs created in the first quarter of this year, thousands of tenants have been able to get their finances back on track and pay down late rent” explains Adrian Gill, director of the two agencies. 

Serious rent arrears appear to have peaked in the third quarter of 2012 when 124,800 households owed more than two months’ rent – and when unemployment in the UK stood at 7.9 per cent.

Since then a boom in employment has been responsible for lifting many of the most precarious tenant households out of serious rent arrears and onto a more sustainable course. 

“A reduced risk of serious rent arrears will be welcome news for existing landlords, facing so many artificial challenges posed by government meddling” says Gill. 

“The massive growth in the number of homes available to rent – driven by both deliberate landlords and accidental landlords coming into the market – has ensured that rents have not outpaced the ability of tenants to pay. The affordability of renting and the number of tenants falling behind on rent also needs to be seen within the context of the rapid expansion of the private rented sector and the addition of millions of extra houses and flats to rent” says Gill.