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Tenants in the UK have felt a financial setback with the number falling into serious rental arrears rising on an annual basis for the first time since 2012, according to the latest tenant arrears tracker report. The data from the estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows that in the fourth quarter of 2014 there were 68,100 tenants in severe rent arrears of more than two months, an annual rise of 7.2%. However, on a quarterly basis the setback is less severe, with 1,700 more cases of severe arrears in the quarter compared with the last quarter of 2013, a quarterly increase of 2.6%. Despite this recent deterioration, the longer term trend for tenant arrears remains positive, the report suggests as improvements seen in 2013 and at the start of 2014 remain overwhelmingly large in comparison. As a result, since reaching a peak of 116,600 tenancies in the third quarter of 2012 the number in severe arrears has dropped by 48,500 as of the fourth quarter of 2014, an improvement of 42%. In terms of the proportion of all tenants now in severe arrears, there was no significant setback in the last quarter. As a percentage of all tenants, 1.4% owed rent arrears of more than two months in the fourth quarter, the same as in the third quarter of 2014 and the fourth quarter of 2013. This leaves a remaining 98.6% of tenants who have consistently avoided serious rental arrears. A slight deterioration in the most serious rental arrears is consistent with figures for overall levels of late rent including shorter lapses on payments. According to the latest Buy to Let Index from Your Move and Reeds Rains, overall tenant arrears of any duration stand at 7.5% as of November, up from 6.6% of rent late in November 2013. However, as with severe arrears, even after November’s slight deterioration, rent arrears remain considerably lower than in previous years, since peaking at 14.6% in February 2010. ‘Escaping the worst deprivations of the financial crisis has taken half a decade and even now, for so many households every month is still a difficult month,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. ‘But just as the occasional setback is inevitable, the long term trend is increasingly clear. Since the sharpest pinnacle of tenant difficulties in 2010 the number in serious rent arrears has practically halved,’ he pointed out. ‘As rising wages start to combine with much lower levels of unemployment, the fundamentals of the economy have started to turn in favour of tenants. If that can continue, then so can the trend away from arrears, as renting becomes more affordable,’ he added. The report also shows that eviction rates have improved. In the third quarter of 2014 some 28,400 tenants faced a court… Continue reading →
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