The number of buy to let tenants with serious rent arrears is expected to tip 100,000 soon, according to rent receivers.
Almost 95,000 tenants were two months or more behind with rents at the end of March, with the number growing at the rate of 10.2% from the last three months of 2011 and 20% from the same time last year.
The courts are also granting more eviction orders for landlords, with a rise of 9% in a year, says Templeton LPA, part of LSL Property Services, the UK’s largest letting agents managing brands like Your Move and Reeds Rains.
Director Paul Jardine said: “While the general tenant population has absorbed the rising cost of renting in the last two years, a minority of tenants are facing severe financial difficulties –a minority that is growing.
“These tenants have been pushed into deeper and deeper arrears by a combination of rising living costs, high rents and a weak labour market, and are now months behind with the rent cheque.
The firm also blames court closures and a backlog in cases for making finances worse fopr tenants and landlords.
“In turn these severe rental arrears figures have been inflated by the ongoing impact of county court closures. The closures have prolonged arrears cases, with landlords less able to gain court dates to quickly remove non-paying tenants.
“Despite the recent surge in severe arrears cases, overall tenant arrears have performed remarkably well given the challenging economic environment.
“As we often see at this point in the year, more financially robust households are now paying down post-Christmas debt and putting their finances in order, which is helping to reduce the overall level of tenant arrears.”
Buy to let mortgage lenders appoint rent receivers to manage rental properties when a landlord has mortgage arrears or the home is repossessed.