Research by estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows rent arrears declining, with 65,200 UK households remaining more than two months behind on rent, compared to 71,700 in the third quarter of 2013.
As the economy improves, unemployment declines and wages begin to rise again, the number of UK tenants severely behind on rental payments has fallen by 9% over the last 12 months.
The improvements mean that around 98.6% of private sector tenants are now avoiding significant rent arrears. This statistic is also being reflected in the declining rate of evictions with court orders drown by 16% in the latest quarter.
The LSL Tenant Arrears Tracker (see below) shows that in absolute terms just 65,200 are more than two months behind on their rent compared to 71,700 in the same period last year, This represents an annual improvement of 6,500 households no longer at risk of eviction.
The main points of the report state:
– The number of tenants severely behind on rental payments has fallen by 9% over the last twelve months
– Improvements mean an overwhelming 98.6% of private sector tenants now avoid significant rent arrears
– Progress begins to be reflected in rate of evictions, as court orders drop by 16% in latest quarter
– 65,200 UK households remain more than two months behind on rent, compared to 71,700 in Q3 2013
– Tenants have rebuilt their financial position over the last year, with the total number facing serious rental arrears falling by a significant 9% over the last twelve months.
Your Move and Reeds Rains part of LSL Property Services PLC.
David Newnes, a director of estate agents Your Move and Reeds Rains has said:
“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,’ ‘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.”
In the meantime landlords have been benefiting from these healthier tenant finances as their own arrears on buy-to-let mortgages has seen further progress in the latest available data, a seventh successive quarter of mortgage arrears improvements.
The total number of buy-to-let mortgages over three months in arrears is now at almost the same level as was seen before the UK entered recession. As of Q2 2014, this figure now stands at 13,400, compared to 13,300 in Q2 2008.
This is 8.8% lower than the 14,700 such cases in the first quarter, while on an annual basis buy-to-let mortgages in arrears have improved by 25.1%, down from 17,900 in arrears of more than 3 months in Q2 2013.
David Newnes again has said:
“Plenty of landlords have had their own financial problems, but after astonishingly steady progress these issues have almost entirely been consigned to the past.
“This isn’t just good news for those with an investment property to support their pension plans. When landlords have a healthier cash flow tenants are less likely to see rapid rises in market rents. There are also more new homes coming onto the lettings market now, as the era of landlords struggling with their mortgages seems to be behind us, at least for the time being.”
Read the full report here
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