Monday, 29 September 2014

Number of tenants with rental arrears 'falls by thousands'

Landlords throughout the UK looking to firm up their financial peace of mind with products like Advanced Rent's own tenant referencing policy will be reassured by new research showing a 35,000, or 35 per cent, drop in the number of tenants with severe rental arrears over the last 12 months. It is complemented by the further good news of a sixth fall in landlords' own mortgage arrears in as many quarters.

LSL Property Services' latest Tenant Arrears Tracker report found that significant rental arrears were now avoided by 98.5 per cent of private sector tenants. Indeed, while there were still some 67,000 households behind on their rental payments by more than two months, this marked a noticeable improvement on the 102,000 recorded in the second quarter of 2013. Between this year's opening quarter and the three months to June, there was a further 0.2 per cent reduction in the number of tenants in severe arrears.

The figures for tenants in serious arrears exceeding two months also looked good when taken as a proportion of all tenants, the 2.2 per cent seen in the second quarter of last year comparing to 1.5 per cent for the equivalent three months in 2014. Overall tenant arrears - those of all durations - are now just 7 per cent as of May 2014, whereas 12 months earlier, they had been 8.2 per cent.

But it isn't just tenants that have benefitted from the more benevolent recent economic climate, with the first quarter of 2014 also seeing a 10.9 per cent fall from the previous three months in the number of buy-to-let mortgages in arrears of more than three months, to 14,700. This amounts to a 17.9 per cent improvement in buy-to-let mortgage arrears over the last 12 months.

Paul Jardine, director and receiver at Templeton LPA, commented: "Landlords and tenants depend closely on one another. But communication is always vital to keep that relationship in effective working order. A good landlord or managing agent will have a working knowledge of their tenants' situation." He added that when tenant arrears did occur, they were usually resolved within a month or two.

Commercial director of LSL Property Services, David Brown said that the landlords worst affected by the credit crunch were now paying down their arrears, and also hailed the combination of favourable interest rates, solid rental yields and the boost provided to total returns by capital appreciation. Overall, the picture is of a rental market that landlords are showing more and more confidence in, as they contemplate investment in associated policies like the tenant referencing of Advanced Rent. 

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) is 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.

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