PRS sector in UK benefits from improvement in tenant arrears

Taylor Scott International News

The number of UK tenants severely behind on rental payments has fallen by 9% over the last 12 months, new research shows. Improvements mean an overwhelming 98.6% of private sector tenants now avoid significant rent arrears and this is being reflected in the rate of evictions with court orders drown by 16% in the latest quarter. Overall the figures from the latest Tenant Arrears Tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows 65,200 UK households remain more than two months behind on rent, compared to 71,700 in the third quarter of 2013. In absolute terms, those more than two months behind on their rent now number just 65,200. This compares to 71,700 tenants at least two months in arrears in the same period last year, or an annual improvement of 6,500 households who no longer face the potential threat of losing their home. As a proportion of all tenants, those in serious arrears of more than two months have also improved, standing at just 1.4% in the third quarter of 2014 compared to 1.6% of all tenants in the same period in 2013. This means 98.6% of tenants in the private rented sector now avoid falling into significant rental arrears. Improvements in the most serious rental arrears also tally with the latest figures on overall levels of late rent, including shorter lapses on payments. According to LSL’s latest Buy to Let Index, overall tenant arrears of any duration now stand at just 7.2% as of September 2014, down from 8.5% in September 2013. ‘The private rented sector has mustered enough new capacity to meet, in part, the growing demand for affordable housing, through the greatest economic depression in modern times,’ said David Newnes, director of estate agents Your Move and Reeds Rains. ‘This isn’t just about those relatively prosperous households forced to put ownership plans temporarily on hold. For many thousands of others, with far tougher monthly budgets, private tenancies have also provided a lifeline. For many renting is now their chosen route as it provides flexibility and mobility,’ he explained. ‘Gradual rent rises, on a par with inflation, have helped. But now a bigger turnaround appears to have happened. For many years more momentary cases of rent arrears have been in decline, yet it’s only recently that the most serious cases where families could actually lose their homes are following suit,’ he pointed out. He said one explanation is the improving jobs market, with the improvement in unemployment constantly outperforming expectations. ‘Wages would however need to rise faster for most households to feel the full effects of economic recovery. Reduced unemployment levels would seem to be far more beneficial for those households who are struggling the most,’ he added. The data also shows that eviction rates see first annual improvement since 2010. In the latest data, for the second quarter, 27,700… Continue reading →

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