A third of tenants who are in rent arrears have begun paying back what they owe, latest data from the sector shows.
And among renters only 15% are behind in their rent although platform PayProp says four in five letting agencies it deals with have seen the number of tenants in arrears grow since March – a problem expected to worsen over the coming weeks as Covid-19 continues to affect their finances.
Its new report, using payment data from UK thousands of letting agencies, shows that while more landlords are facing rent arrears, about one-third of agencies actually saw debts reduce as tenants began repaying what they owed.
“After an initial surge in March when Covid-19 started to spread rapidly across the UK, heightened levels of rent arrears could persist for many months to come, despite many tenants settling some of their debt,” says Neil Cobbold, chief sales officer at PayProp.
“Measures like the furlough scheme and Universal Credit increases have helped tenants to continue paying their rent, but payments are still less predictable than usual, and the furlough scheme is almost at an end.”
It suggests that if letting agencies keep good records, they can help landlords stay on top of rent arrears, allowing them to see how much is owed and by which tenants, as well as to create payment plans. “Keeping a record of all conversations and agreements made with tenants will also reduce the chances of payment disputes occurring later on,” Cobbold explains.
And with the evictions process put on hold for a further two months, he adds that landlords will need to consider their options carefully as there’s no guarantee that the Government won’t extend it further.