Research undertaken on behalf of Paragon Bank has revealed that the proportion of landlords experiencing tenants in rental arrears has fallen to its lowest level since the metric was first tracked in 2017, as has the proportion of vacant rental properties.
A survey of over 750 landlords, carried out by BVA BDRC for Paragon Bank, has highlighted how less than one third (32%) of landlords stated that they have had at least one tenant in rental arrears during the previous 12 months.
This follows a fall from 34% against the previous quarter and marks the lowest level of rent arrears in six years, when the metric was first tracked in its current format.
Richard Rowntree, Managing Director for Mortgages at Paragon Bank, comments: “It’s great to see that that the proportion of landlords experiencing tenants who are behind on their rent has fallen to the lowest levels since the metric was first tracked in 2017. We do know, however, that the cost-of-living crisis will not impact tenants in the same way, and it is likely that paying rent will be a real challenge for some. From speaking to landlords, we also know that many have good relationships with their tenants and are often open to working with them to overcome any financial issues.”
The proportion of landlords reporting void periods during the previous three months also hit a low during this wave. Fewer than one in four (24%) landlords experienced a vacant rental property in Q4 2022, a decline of 4-percentage points since the quarter before.
During the same period, a drop from 82 to 70 days was also seen in the average void duration. Interestingly, the data revealed that landlords managing larger portfolios, those with eleven or more lets, tend to report having properties vacant for shorter periods of 44 days compared to average.
Rowntree comments: “It’s extremely encouraging to hear that voids reported by landlords are at their lowest level since 2017.
“This is unsurprising given the demand for privately rented homes, also at record levels. This adds further weight to the argument for investment in affordable housing across all tenures, something that buy-to-let landlords should be recognised for making an essential contribution towards.”