Severe rental arrears at lowest level for two years

Amid so many signs of an improving economy and with it, increased financial security for landlords and tenants alike, landlord rent guarantee policyholders have even more reason for cheer with the news of a sharp fall in the number of tenants with severe rental arrears, to the lowest level in two years. That is the headline finding of the latest Tenant Arrears Tracker of LSL Property Services, which might just embolden a few Advanced Rent (http://www.advancedrent.co.uk) clients into investing further in their portfolio.

The third quarter of 2013 saw a 25 per cent decline in the number of tenants behind on their rent by a period exceeding two months. It means that there are now just 69,000 tenants in severe arrears, which is 23,000 lower than the figure recorded in the second quarter. It's the lowest level of severe rental arrears that the Tenant Arrears Tracker has recorded since the third quarter of 2011, which is obviously very good news for rent indemnity policyholders.

Paul Jardine, Templeton LPA director and receiver, described the figure as "an important landmark", adding that "Tenants in these most severe situations could face eviction whereas the majority of arrears cases are resolved much more easily." He said that there was "a qualitative difference which makes this particular improvement so important. Such a dramatic fall in the number of people potentially losing their homes is not just an excellent signal for the private rented sector but for the entire UK economy."

All other relevant figures point to an economic environment that is increasingly conducive to landlord rent insurance policyholders choosing to add to their portfolios. Tenants in severe arrears now account for only 1.7 per cent of all tenancies in England and Wales, compared to the previous quarter's 2.4 per cent. The improvement is even more dramatic when judged on an annual basis, with 34 per cent fewer tenants being in severe arrears in the third quarter of this year compared to the same quarter in 2012.

But there has also been a more general improvement in tenant finances for landlords involved in a rent guarantee scheme to savour,  with LSL's most recent Buy-to-let Index having also revealed a fall in overall tenant arrears in August, in which 7.8 per cent of all rent was late or unpaid - compared to the previous month's 8.2 per cent. Even the number of tenants facing eviction through court order has plummeted, with the 26,759 tenants that faced eviction notices in 2013's second quarter representing a 9.7 per cent improvement on the previous quarter's figure.

With our acclaimed Rent In Advance and Rent Guaranteed products, here at Advanced Rent (http://www.advancedrent.co.uk), we can further assure you of financial security as a landlord, an assurance that goes hand in hand with the real improvements in the state of the buy-to-let sector over the last year or so. Contact us now to find out more.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.