The number of private tenants in serious rent arrears has gone down, according to the latest Tenant Arrears Tracker from estate agents Your Move and Reeds Rains.
In the fourth quarter of 2015 (Q4), 1,500 households renting from private landlords had moved out of serious rent arrears, compared to the previous quarter. This is a 1.5% quarterly improvement, reversing the worsening trend recorded throughout the early parts of 2015.
In Q4 last year, there were 82,900 households behind on more than two months’ rent, down from 84,200 in Q3 2015.
Number of Tenants in Serious Rent Arrears Going Down
As a proportion of all households renting from private landlords, just 1.6% are in serious rent arrears, says the report.
Comparatively, 2.9% of tenancies were in serious rent arrears in Q1 2008 – a record high. The absolute number of tenants suffering serious rent arrears was also considerably higher in Q3 2012, at 116,600.
The Director of Your Move and Reeds Rains, Adrian Gill, comments on the findings: “Private renting is still absorbing thousands of extra households every month, housing millions more than just a few years ago. As this tenure of housing and this way of living grows, affordability is the issue that goes hand-in-hand with questions of capacity.
“An individual tenant is still extremely unlikely to fall into serious rent arrears. In fact, the proportion of renters getting seriously behind on payments has dropped considerably over the longer term. But absolute numbers are now going the right way too. With fewer people at risk from more serious consequences of struggling to pay the rent, this is great news.”1
Additionally, cases of landlords falling behind on their buy-to-let mortgages are also falling. In Q4 2015, 5,500 landlords were in mortgage arrears, down by 3.5% from 5,700 in Q3.
Annually, landlord finances have progressed even further. The amount of buy-to-let mortgage arrears has dropped by 54% since it stood at 11,900 in Q4 2014.
However, it is still uncertain how the forthcoming changes to landlord taxes will affect investors. Positively, one finance expert has expressed his belief that buy-to-let is not dead, and recent research found that many landlords are still confident in the sector.
If your tenants are suffering from rent arrears, or you just want some peace of mind, the best thing to do is take out a rent guarantee insurance policy, which ensures that you still get paid even if your tenant defaults on the rent.
For more advice for dealing with and avoiding rent arrears, this guide for landlords should help: https://www.justlandlords.co.uk/news/protecting-your-lettings-business-from-rent-arrears/
1 https://www.landlordtoday.co.uk/breaking-news/2016/3/tenants-reverse-trend-to-serious-rent-arrears