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Tenant arrears up 25% year-on-year

Posted by on July 3, 2012

Some 100,400 tenants in England and Wales were in severe arrears in Q2 2012, a year-on-year increase of 24%, according to Templeton LPA’s latest Tenant Arrears Tracker.

The figures are the highest since the company, which is part of the LSL Property Services group, began tracking the market in 2008.

The number of tenants in severe financial difficulty climbed by 8% in Q2 of 2012, with over 7,000 more tenants over two months in arrears than in Q1 of 2012

The increased number of tenants in severe arrears has also driven a rise in the number of tenants being evicted through court orders.

In Q1 of the year, 26,060 tenants faced eviction notices – 6% more than in the previous quarter, and 5% more than in the same period of 2011.

Templeton LPA director and receiver Paul Jardine says that as the private rented sector grows, the number of tenants in dire financial straits is steadily climbing, with falling wages in real terms compounded by rising rents,

He says: “The wider rental market currently includes a much higher proportion of financially comfortable tenants who would have been buyers before the initial credit crunch, reining in general arrears across the market as a whole. However, this will be no comfort to the growing minority of tenants several months behind with their monthly rent cheques.”

With mortgage finance still difficult to secure, he warns that the contrast between better-off frustrated buyers stuck in rented accommodation renters in severe arrears will become even more stark and he predicts that the number of tenant evictions is likely to increase.

Source: www.mortgagestrategy.co.uk

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