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Estate and Lettings Agent Claims Arrears Rise

An estate and lettings agent has analysed how the level of rental arrears has grown between each wave of the pandemic.

The research by Barrows and Forrester Estate and Lettings Agent found that, during wave one of the pandemic restrictions, figures from the ONS estimated that 7% of the 4.8 million private rented households in England were at least one month behind on their rent payments. This equated to some 335,860 homes.

The average rent in England in July 2020 – just as the country was emerging from the first wave of the pandemic – was £826 per month, meaning total rent arrears during wave one were at least £277.3 million.
However, given that a number of households were more than one month in arrears, Barrows and Forrester says this is a relatively conservative figure.

During wave two of the pandemic, the agency said the number of households in at least one month’s arrears rose from 7% to 9% , which means wave two witnessed some 431,820 private rental households falling into arrears.

The research revealed that the average cost of renting was also higher during wave two than during wave one, increasing from £826 to £846 per month. As a result, with nearly 432,000 homes at least one month behind on rent, Barrows and Forrester estimates the cash total of arrears to have been at least £365.3 million – marking a rise of 31.75% from wave one, ‘a pound and pence difference of just over £88 million’.

The East Midlands was home to the largest arrears growth, with rent arrears rising by over 36% between the first two waves of the pandemic. The South West and the East were also badly affected, with arrears increasing by 35.6%, while in the South East they grew by 35%.

Perhaps surprisingly, given the pandemic’s impact on major cities, the smallest regional increase between each wave was in London, where total arrears grew by just over 24%.

However, due to London’s very high rent prices, this 24% growth accounted for almost £28.5 million, by far the largest sum in the nation.

“The first two waves of the pandemic shook the rental market to the core. All of a sudden, many tenants who had no previous problems with paying rent on time found themselves out of work, or at least having their hours significantly cut as employers tried desperately to find a route to survival during an unprecedented moment in modern history,” James Forrester, managing director of Barrows and Forrester, said.

“This left hundreds of thousands of people unable to afford steady rent payments and so the government stepped in to protect them, making it almost impossible for landlords to evict them during the height of the pandemic.”

He added: “As a result, when wave two arrived, we saw a 2% rise in the number of private rental households in arrears which came at a considerable cost to the nation’s landlords.

“We are starting to see normality return to the rental market, but this will do little to comfort those landlords who are now severely out of pocket and should a third wave materialise, we will no doubt see yet another increase in the total amount of rental arrears seen across the market.”

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