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Progress for UK residential tenants significantly behind on rent halted in the first quarter of the year with those in arrears up 4% since a year ago. In the first three months of 2015 there were now 70,900 tenants facing more than two months of unpaid rent, some 1,500 more households than in the previous quarter, when 69,400 tenants were over two months behind on rent, or a quarterly increase of 2.2%. Since the same point last year the number of tenancies in such a position has grown by 4%, with 2,700 additional households falling into this most serious category of late rent, according to the latest tenant arrears tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services. This setback represents a levelling off in the number of tenants in the most dire financial situation. Compared to the worst peak of serious rent arrears in third quarter of 2012, when 116,600 households faced more than two months in late rent, this has moderated significantly, to the tune of 45,700 fewer such cases in the first quarter of 2015. However, the report points out that progress has now been incremental or even backwards for over 18 months with the fourth quarter of 2013 still the best calendar quarter on record, when just 63,500 struggled with serious rent arrears. Despite a lack of progress since the end of 2013, the chance of a given tenant falling so far behind on rent is extremely low. As a proportion of all tenants, just 1.4% owed more than two months’ rent in the first quarter of 2015, the same as in the fourth quarter of 2014. This compares to 2.9% in the first quarter of 2008 even before the worst of the financial crisis and recession. A setback for the most severe cases of rent arrears comes despite a more encouraging trend among those who fall more incrementally behind on payments. As of March 2015, 7.4% of rent is now in arrears of any length, down from 7.6% in February 2015 and down from 7.8% of all rent late a year before in March 2014. As with severe arrears, rent arrears of all lengths remain considerably lower than in previous years, since peaking at 14.6% in February 2010. ‘Tenants are now far less likely to be out of work than at this point last year but many tenants are still struggling to keep up with household expenses in the face of extremely modest wages. There are some signs on the horizon this will improve, but in the meantime a small but significant minority of households are facing a real challenge to find the rent every month,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. ‘Other factors are at play too. There are also more cases of severe arrears, in absolute terms, because there are more people renting their home overall. The chance of a… Continue reading →
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