Landlord cash flow is under threat from huge numbers of tenants who face mounting rent arrears and credit problems, according to figures released by debt charity Consumer Credit Counselling Service (CCCS).
Calls from tenants seeking help with their finances has soared by 55% over the past three years.
More than 10,250 tenants with rent arrears asked CCCS for help in 2011 – a rise of 30% over three years.
A rise in the cost of living, more tenants out of work and continuing rent increases has left many renters struggling with debt.
CCCS says private tenants owed an average £924 in arrears to their landlords, compared with £705 for renters in social housing and £622 for local authority tenants.
Many tenants were also slow to realise their financial predicament and delayed asking for help by up to a year, which worsened their financial situation, said the charity.
Consumer Affairs Minister Norman Lamb said: “The report shows that unmanageable debt is rising in all parts of society.
“It reminds us how vitally important it is to understand the needs of those who seek help, so that we can give them the right kind of help
“We want people to be better informed and able to make good financial choices, taking back control...
of their money.”
Unemployment was the key debt problem driver, according to CCCS, with 48% of all callers to the charity blaming losing their job, difficulties in finding work or a cut in wages as the main trigger of their financial difficulties.
For landlords, credit control is the key. Rather than letting late rent payments slide, talk to tenants about the reason for paying late and put together an action plan for dealing with tenants who lose their jobs after moving in.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums