Severe rent arrears on the rise warns lettings agency chain
There’s been a four per cent rise in the number of private sector tenants owing more than two months rent, according to LSL Property Services.
Figures for the first quarter of 2015 show that there are 70,900 households facing what the agency calls “severe rent arrears” up from 68,200 a year earlier.
Eviction orders have also increased – there are now 28,900 households facing losing their home, up 2.3 per cent on the final quarter of 2014 but down 7.9 per cent over the past year.
Compared to the worst ‘downturn’ peak of serious rent arrears in Q3 2012, when 116,600 households faced more than two months in late rent, this has moderated significantly. However, the situation has deteriorated from the Q4 2013 high of just 63,500 with two months of rent arrears.
As of March 2015, 7.4 per cent of rent is now in arrears of any length, down from 7.6 per cent in February.
“Tenants are now far less likely to be out of work than at this point last year – a low-paid job is clearly better than no job at all, and this has had a massive effect on tenant finances as a whole. But the easy progress from a lower unemployment rate may now have been made” warns LSL spokesman Adrian Gill.
“Earnings are a crunch point. Many tenants are still struggling to keep up with household expenses in the face of extremely modest wages. There are also more cases of severe arrears, in absolute terms, because there are more people renting their home overall. The chance of a given tenant failing to pay the rent within a couple of months is extremely low – and falling. The flipside to these figures are that more than 98 per cent never get into serious arrears” he says.