Rent arrears soar as tenants get to grips with record rents
Rents rose by their fastest rate in a year last month, bouncing up 1.2%, whilst tenants arrears grew by 19.5%.
The findings are in this morning’s new buy-to-let report from LSL, which owns national chains Your Move and Reeds Rains. more
It says that 10.7% of all UK rent was unpaid or late by the end of August – up from the 9% of rent unpaid or late in July.
Unpaid rent totalled an estimated £300m across the UK in August, up 19.5% from the £251m unpaid in the previous month.
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The mounting arrears come as the average rent in England and Wales rose by 1.2% to £713 per month, surpassing the previous record high of £705 in July. It means the average rent was £27 pcm higher than in August 2010.
On a monthly basis, rents increased fastest in Wales and the South-East, where they rose by 2.1%. The next biggest increases were in London and the South-West, where they rose by 1.5% and 1.3% respectively. Rents only declined in the Midlands compared to July, falling by 0.4% in both the West Midlands and the East Midlands.
David Brown, Commercial Director of LSL Property Services, said: “We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months.
“Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers. In the last two years, average rents have risen by more than £50 a month.
“With significant improvement in the number of buyers able to secure a mortgage unlikely in the foreseeable future, competition for rental accommodation will not drop and further rent rises remain on the cards.”
Brown said the scale of tenant arrears showed the pressure on tenant households.
He said: “With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long term we anticipate that rental arrears will become a growing financial problem for landlords.”