Taylor Scott International News
Fewer tenants in the UK are falling into serious rent arrears thanks to the improving employment market and landlords are benefitting from healthier tenant finances, according to the latest lettings agents report. In absolute terms, just 86,200 tenants across the UK are more than two months behind in their rent in the first quarter of 2016 compared to 89,300 in the previous quarter, a fall of 4%. The data from the report from Your Move and Reeds Rains also shows that just 1% face serious arrears and for landlords there are the fewest buy to let mortgage arrears since 2007. Since 2008, there have been on average 92,600 tenants in serious arrears in the first quarter of each year meaning that the first quarter of 2016 is also substantially lower than the long term average. ‘Fewer tenants in serious arrears reflect the health of the jobs market. With an extra 44,000 jobs created in the first quarter of this year, thousands of tenants have been able to get their finances back on track and pay down late rent,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. He explained that serious rent arrears peaked in the third quarter of 2012 when 124,800 households owed more than two months’ rent and when unemployment in the UK stood at 7.9%. Since then a boom in employment has been responsible for lifting many of the most precarious tenant households out of serious rent arrears and onto a more sustainable course. The direction of travel looks very positive. ‘A reduced risk of serious rent arrears will be welcome news for existing landlords, facing so many artificial challenges posed by government meddling. But no one should be complacent as managing a property is never simple. Some landlords are being held back from buying property by the Stamp Duty Surcharge. If this stems the flow of new homes into the rental market, then shortages in some areas could push up rents and hitting affordability,’ Gill pointed out. The number of tenants more than two months behind with rent has fallen by 16% since the eve of the financial crisis and recession in the second quarter of 2008 from 102,900 to today’s total of 86,200. This is despite the expansion, over exactly the same period. At the start of this period, there were 3.6 million households living in the UK private rented sector. Now, after just eight years, this has grown by 62% to reach a total of 5.8 million households as of the first quarter of 2016. ‘The massive growth in the number of homes available to rent, driven by both deliberate landlords and accidental landlords coming into the market, has ensured that rents have not outpaced the ability of tenants to pay. The affordability of renting and the number of tenants falling behind on rent also needs to be seen within the context of… Taylor Scott International
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