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Buy to let arrears plunge by more than a third
22 July 2014
The number of private tenants in serious rent arrears has plunged by more than a third in the past year, according to a new study.
Around 67,000 are two months or more behind with their rents compared with 102,000 at the same time 12 months ago, says LSL Property Services, which runs high street letting agents Your Move and Reeds Rains.
The figures represent 35% of private tenants getting on top of their finances.
As a percentage of all tenants, the research shows 1.5% of all tenants are in serious arrears in the second quarter of this year. Last year, the percentage was 2.2% for the same period.
However, in financial terms tenants in serious arrears owe 7% of all rents due. The figure is an improvement on the second three months of 2013 when 8.2% of all rents were in serious arrears.
Despite the fall in serious arrears, more private tenants risk losing their homes as the number facing eviction is rising.
Landlord cash flow easing
In the first three months of 2014, 33,000 possession orders were issued – up 5.9% from the previous quarter and 10% higher than in the first quarter of 2013.
Better cash flow from tenants has also benefitted landlord finances.
Buy to let mortgage arrears dropped for the sixth quarter in a row. Around 14,700 buy to let mortgages are in arrears, down 10.9% from the previous quarter and 17.9% year-on-year.
“For a minority of tenants there was a significant rise in serious rental arrears. As the job market gradually comes back to life, the effect on the most hard-pressed of households is clear to be seen,” said spokesman Paul Jardine.”
“Landlords and tenants depend closely on one another. If rent is late, it is vital that both parties discuss how to get the tenancy back on track as soon as possible. When rental arrears do arise, they are usually resolved in the space of a month or two – and the chances of more serious problems arising are falling even further.”