Posts with tag: rental arrears

Rental arrears rise to 9.1% in March

Published On: April 22, 2016 at 10:56 am

Tags: annual rents,Buy-to-Let,landlords,rental arrears,tenants

A concerning new report from Your Move and Reeds Rains suggests that numbers of tenants in rental arrears is on the rise.

Data from the investigation shows that across England and Wales, the overall level of rental arrears is currently 9.1%. This is a slight rise from the 8.8% recorded in February.

Setbacks

More worryingly, the number of tenants in arrears has risen more substantially year-on-year. In March 2015, the arrears rate stood at 7.4%.

This said, looking longer-term, levels of rental arrears are more encouraging. The figure of 9.1% recorded in March is still small in comparison to the all time high of 14.6% of rent payable in arrears. This figure was reached in February 2010.

Director of Your Move and Reeds Rains, Adrian Gill, believes that landlords need tenants with good finances. Similarly, he notes that tenants need a property that they can afford. Gill said, ‘while there is always room for healthy negotiation on rents, both landlords and tenants need each other to reach a deal. So some of the language of confrontation between landlords and tenants is not healthy or constructive.’[1]

Rental arrears rise to 9.1% in March

Answers

Continuing, Gill said, ‘for private renting to remain an affordable option and a high-quality home for millions, the answer is more supply and more choice. That means lifting the barriers to investment in property, rather than adding fresh penalties for landlords aspiring for their own financial security.’[1]

‘Good landlords also understand that their interests and the interests of their tenants are aligned-a tenancy should be a mutually beneficial deal. That takes expertise in managing a property and it takes commitment. The growth of private renting has changed society in terms of the number of people who are tenants, but it has also raised questions for those who now find themselves as landlords, either purposefully or in some cases through a relatively unplanned course of events. Managing properties well must include regular communication with tenants, to address concerns, arrange maintenance and to avoid the possibility of rent arrears,’ Mr Gill concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-arrears-hit-91-as-tenants-feel-financial-pinch.html

More landlords look to evict tenants

Published On: August 25, 2014 at 11:18 am

Author: Em Morley

Categories: Landlord News

Tags: evicting tenants,rental arrears

LSL Property Services has recently released concerning figures that suggest there are growing numbers of landlords seeking eviction of tenants through Britain’s courts.

Rising

The findings of the LSL Property Services report show that the number of court orders for possession rose by 5.9% during the fourth quarter of 2013. In addition, the figures were up by 10% on the same stage twelve months ago.[1]

However, despite these increases, the number of tenants facing severe rent arrears has fallen. According to LSL, the number tenants facing rental arrears in excess of 2 months has fallen by 35, 000 during the last year. Worryingly, around 67,000 tenants remain in serious financial trouble.[1]

Unknown

Paul Jardine, director of chartered surveyors Templeton LPA, believes that it remains to be seen what impact the economic recovery will have on vulnerable tenants. Jardine said, ‘Some households succumbed to the wave of unemployment that followed the 2008 crisis, and as the broader monthly squeeze tightened its grip. For a time – though still for only a small minority of tenants – there was a significant rise in rental arrears. But now as the jobs market gradually comes back to life, the effect on the most hard-pressed of households is clear to be seen.’[1]

Mr Jardine goes on to say that, ‘while wages are yet to pick up significantly, those in the most serious financial problems often face a lack of any earnings at all. So as the risk of unemployment retreats this year, those with serious problems paying their rent – and most at risk of losing their homes – are benefiting the most.’[1]

More landlords

It can be argued that the increase in court orders is due to the boom in the buy-to-let market. As Dean Woodman-Evans, director of The Landlord Association explains; -‘the number of private landlords renting property has increased so the number of evictions are bound to increase. With that said however, more and more evictions are due to rent arrears as tenants find it harder to meet competitive rental yields. We have noticed a distinct increase in cases by our own landlords.’[1]

[1] http://www.landlordexpert.co.uk/2014/08/25/the-landlord-association-announces-its-updated-panel-of-solicitors-to-aid-landlords-with-problem-tenants/

Arrears and Voids Decline

Published On: August 7, 2013 at 12:45 pm

Author: Em Morley

Categories: Landlord News

Tags: rental arrears,rental voids

Rates of rental arrears have dropped to the lowest number for more than two years, revealed the National Landlords Association (NLA).

The NLA’s recent research found that 39% of landlords have witnessed rental arrears in the past year, down by 9% annually, and back to figures seen in Quarter 1 (Q1) 2010.¹

Void periods in private rental accommodation have also decreased by 5% since Q2 2013 to 33%, a number last seen in 2012.1

Arrears and Voids Decline

Regionally, voids are most seen in the North East, where 60% of landlords have suffered empty properties in the last three months, and are rarely seen in the South West, where just 20% of landlords have had vacant periods in the same timeframe.1

The study also discovered that seven in ten void periods are unexpected, and landlords cover the cost of empty properties in different ways:

33% of landlords use rent from their other rental homes to cover the cost of void periods.
10% use their other earnings.
9% use savings funds.1

Chairman of the NLA, Carolyn Uphill, says: “It is positive to see reductions in the instances of arrears and voids. This demonstrates that long term, enduring tenancies are on the rise, as it is in every landlord’s business interest to maintain good, long lasting tenancies and avoid voids.

“However, it is worrying that void periods often come as a surprise to landlords. Whilst voids represent more of a problem in the North than in the South, where demand is far higher, it is imperative that empty properties are filled quickly, following any necessary maintenance and improvements.

“The NLA’s advice to landlords looking to minimise void periods is to talk openly with their tenants about their future plans. This will give the landlord some idea of when the property might next be empty, and allow them to make any improvements and plan advertising activity in good time. It is also wise to budget for 11 months’ rent per year, to avoid needing to find additional funds to cover outgoings if a void does arise.”1

¹http://www.landlords.org.uk/news-campaigns/news/arrears-and-voids-decline