Property

Rent arrears at lowest level for ten years

Property Reporter
|
4th August 2021
Rent Up 551

During Q2 2021, landlords had an average of 1.3 tenants with outstanding rent payments - the lowest number since Q1 2011 when research agency BVA BDRC started tracking the metric, according to research carried out on behalf of Paragon Bank.

The data revealed that this figure comes following a decline from 1.6 tenants per landlord since Q1 2021, with the numbers of tenants in arrears falling consistently after climbing to 2.1 in Q2 2020, as the Covid-19 pandemic impacted incomes.

In addition, the average amount of outstanding rent has reached a four-year low. After falling from £2,376 in Q1 2021 to £1,781 Q2, a reduction of £595, the average amount of rental payments owed to landlords is the lowest since the end of 2017 when it sat at £1,584.

The survey of over 750 landlords found that 36% have had a tenant request a change to their rent, most commonly rental holidays (18%) or a reduction in rent of up to 20% (14%). Highlighting the flexible approach taken by landlords in managing their tenancies during the pandemic, agreements were reached in almost all cases as 36% of landlords also said they had granted requests to some form of change to rent. Encouragingly, such requests have been declining since the start of the pandemic, with the proportion of those asking to change rental agreements falling by seven percentage points year-on-year.

Moray Hulme, Paragon Bank Director of Mortgage Sales said: “It is really encouraging to see the average number of tenants in rent arrears at the lowest point for ten years and the amount of outstanding rent at the lowest since 2017.

“Our latest survey has also shown us how landlords have been supporting tenants throughout the pandemic, granting requests to changes to rent in the vast majority of cases.

“These requests have been falling alongside the incidences and volume of rent arrears and considering that the fewest number of people are now on furlough since the scheme launched in March 2020, it is a good indicator that the economy is bouncing back well.”

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