Landlords rejoice as serious rent arrears see a u-turn

Landlords rejoice as serious rent arrears see a u-turn

The latest data from Your Move and Reeds Rains has revealed that despite difficult winter period, 1,500 households have escaped serious rent build-ups in Q4, compared to Q3.

By the final quarter of 2015, a net 1,500 households have moved out of serious rent arrears, compared to Q3. This is a 1.5% quarter-on-quarter improvement, and reverses some of a deteriorating trend throughout the earlier parts of 2015. There are now 82,900 households behind on more than two months’ rent, down from 84,200 in Q3 2015.

While correcting an emerging upward trend, the latest quarterly improvement still represents a worsening on an annual basis. The number of tenants in serious rent arrears remains 19.5% higher than in Q4 2015.

However as a proportion of the entire market, the latest total still represents just 1.6% of tenancies across the UK private rented sector. This compares to a peak proportion of 2.9% of tenants in Q1 2008. The absolute number of tenants in serious arrears is also mild on a historical basis, considerably below the record 116,600 such cases seen in Q3 2012.

Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “Private renting is still absorbing thousands of extra households every month – housing millions more than just a few years ago. As this tenure of housing and this way of living grows, affordability is the issue that goes hand-in-hand with questions of capacity.

An individual tenant is still extremely unlikely to fall into serious rent arrears. In fact the proportion of renters getting seriously behind on payments has dropped considerably over the longer term. But absolute numbers are now going the right way too. With fewer people at risk from more serious consequences of struggling to pay the rent, this is great news.”


Eviction rates drop in response to healthier tenant finances

Meanwhile, in the same quarter of Q4 2015, there were a total of 26,676 court orders issued for the eviction of tenants, on a seasonally adjusted basis. This is down marginally by 0.4% compared to Q3, when seasonally adjusted eviction orders stood at 26,775. On an annual basis, downward progress for evictions is more considerable, with 5.3% fewer evictions than 28,167 a year before in Q4 2014. The latest figures for evictions represent 32% of the stock of tenants in severe arrears in Q4, meaning only around one-in-three such cases translate into evictions each quarter.

Landlord finances healthiest on record

Cases of landlords falling behind on their own financial commitments are also diminishing. As of Q4 2015 there were 5,500 examples of buy-to-let mortgage arrears, down by 3.5% from 5,700 in Q3, and a resumption of downward progress after the figure previously remained the same between Q2 and Q3 2015.
On an annual basis, progress for landlords’ finances has been far more considerable. The number of buy-to-let mortgages in arrears has dropped by 54% since standing at 11,900 cases in Q4 2014.

Adrian Gill concludes: “Landlords and the buy-to-let industry have come in for serious criticism over the last year – but the overwhelming evidence points to a vital, growing and successful industry. Landlords in the UK are providing more homes to let every month, expanding supply for tenants – who avoid any serious problems paying the rent in more than 98% of cases. When late rent does happen, landlords appear to be extremely flexible in the majority of cases, and eviction orders are decreasingly necessary. Buy-to-let mortgages are also increasingly reliable for lenders, as landlords are ever less likely to fall into arrears themselves.

It would be wrong to say that the UK private rented sector is perfect. But in the context of these facts, the demonization of landlords by some policy makers seems at best out of proportion.

Most urgently, rising rents are a signal that demand is there for even more homes to let. In a purchase market that increasingly favours sellers, demand from would-be first time buyers will continue to grow even faster for rented homes. Additional investment from landlords should be welcomed. Yet the government’s looming Stamp Duty surcharge – which explicitly punishes investment in new buy-to-let properties – could damage supply of additional homes to let and potentially disrupt the relative balance of the modern buy-to-let industry.”

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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