Tenants struggling with late rent have made significant progress in the last twelve months, according to data from Templeton LPA, the specialist practice of LPA Receivers.
As of the first quarter of 2014, the number of tenants in severe arrears – those more than two months behind on their rent – stands at 68,000, down from 105,000 in the same period last year. Representing a 35% annual improvement, this comes despite an 11.1% seasonal increase in cases of severe arrears between Q4 2013 and Q1 2014.
As a proportion of all tenants, this number in serious arrears of more than two months has also improved. Those owing more than two months’ rent now represent 1.4% of all tenancies in the UK, down from 2.3% of all tenancies one year ago and flat on 1.4% in the previous quarter, Q4 2013.
A moderate setback in levels of the most severe arrears tallies with wider improvements in tenant finances as a whole. According to LSL’s latest Buy-to-Let Index, overall tenant arrears have fallen since December to stand at the second lowest level on record, with only 6.9% of all rent late or unpaid as of February. This compares with 7.4% of all rent in the previous month and 9.7% in December.
Paul Jardine, director and receiver at Templeton LPA, said: “Personal finances are finally defrosting across the UK, with many people experiencing the first real financial spring for half a decade. Tens of thousands of households are looking forward to a slightly more comfortable year in 2014, without the lurking anticipation of serious rental arrears.
“It’s true there remains a long way to go. Certainly, for any particular tenant still facing serious hardship, this won’t yet feel like an improvement. And the seasonal difficulties of the festive period and New Year have taken their usual toll. But a clear positive trend is emerging. With three successive quarters showing a sharp annual improvement in the number of such cases, the chance of tenants falling so far behind is receding. Slowly but surely a brighter economic picture is breaking through the gloom and is starting to make a real difference to purse strings across the country.”
Improvements in the level of severe tenant arrears are consistent with slightly lower eviction rates. According to the most recent data, the number of tenants facing eviction through court order fell in the final quarter of 2013, with a total of 30,324 tenants facing eviction notices. This represents a quarterly fall of 3.4%, down from 31,380 in Q3 2013.
