The number of tenants in the most serious rent arrears is rising again, a firm of receivers has warned. It says that the number is now 20% above the long-term average, with court orders for possession creeping up.
Templeton LPA, part of LSL, says that in the first three months of this year, the number of tenants in severe arrears – people more than two months behind on their rent – rose by 4.8% on the previous quarter.
Tenant Financial Strain – Severe Arrears Amidst Overall Decline
The rise comes after the improvement reported in the final quarter of last year, when the number of these most severe cases had fallen by 14.5%.
In absolute terms, the number of tenants in severe arrears rose by 4,000 to 94,000 in the first quarter.
On an annual basis, the number of tenants in severe arrears remains down marginally, by 2.9%.
However, the level of severe arrears over the last 12 months is now 20% above the long-term average. Such tenants now represent 2.3% of tenancies in England and Wales, up from 2.2% in the previous quarter.
While severe arrears cases have worsened, overall tenant arrears fell in February, with 7.4% of all rent late or unpaid. This compares with 8.1% in the previous month and 10.1% in December.
Future Outlook – Assessing Impacts and Strategies Amid Tenant Financial Stress
The number of tenants facing eviction through court order also reflects renewed difficulties for tenants’ finances. In the final quarter of 2012, 25,286 tenants faced eviction notices, a quarterly rise of 5.7%.
This puts evictions at the highest level ever recorded in an individual quarter, and 10.2% higher than a year before.
Landlords are, however, managing to keep up well with their mortgage payments. The number of buy-to-let mortgages over three months in arrears fell by 10% to 19,700 by the end of 2012.
Article courtesy of Landlord Today“”
