Number of tenants with rent arrears up 24%
The number of tenants more than two months behind on their rent has increased by nearly a quarter over the past year, according to chartered surveyors Templeton LPA,
The number if tenants in serious arrears increased by 8 per cent in the second quarter of 2012 to 100,400, its highest level since tenant arrears tracker records began in 2008.
The increase is attributed to high levels of unemployment, wage freezes, the high cost of living and soaring rents.
Many people are unable to afford the high deposits needed to secure a mortgage and are turning to renting instead.
The increased competition for rented accommodation has led to rents increasing substantially.
Paul Jardine, director and receiver at Templeton LPA, said: “Falling wages in real terms have been compounded by rising rents, pushing a greater number of rented households over the edge financially.
“With the instability in the labour market and wider economy, and public sector cuts still to come, the section of renters in multiple months of arrears is likely to continue its expansion.”
Although the number of tenants with severe arrears has increased, the total number of tenants in arrears fell to 8.9 per cent in May, from 9.9 per cent in April.
This was attributed to a higher number of financially comfortable tenants in the rental market, including those who would be house buyers in more favourable market conditions.
Meanwhile, under the Government’s new procedures for the payment of universal credit, private landlords will no longer be able to demand direct rent payments if a tenant is in arrears or is declared vulnerable.
Under the new system, payments will be made directly to tenants and it will be up to the tenant to pay their rent.
The Residential Landlords Association has expressed concern that the proposals are unclear and there will be no right of redress for landlord if things go wrong.