Tenant arrears are rising in England and Wales

February 3, 2016Tags: Landlords | buy-to-let | letting | lettings | tenants | arrears

Every quarter we carry out research to see how well tenants and landlords are doing from a financial perspective. Our latest “Tenant Arrears Tracker” shows that, although in theory the economy is performing well, more tenants are struggling to pay their rent. 

Research from our Q3 2015 index showed the number of tenants who were two months or more behind with their rental payments had risen by 13.8%. This means there are more than 84,000 tenants who haven’t paid their landlords rent for the last two months. In the previous quarter the figure was 10,000 less and when you look at the year-on-year change, it shows the number in arrears have gone up by 13,000 - an increase of a whopping 18% and not good news for landlords who are out of pocket. 

That being said, it’s important to put these numbers into context. The number of people renting is rising, so when you look at the percentage of people in arrears, the picture doesn’t look as bad. For example, 1.6% of tenants are in serious arrears (defined as two months or more) in Q3 2015. Although this percentage is up on the previous quarter and year, it’s still lower than the peak of 2.9% experienced early in the last recession (Q1 2008). 

And there is some good news for tenants in that although more are defaulting, the number being asked to leave the property – i.e. being evicted - is falling. In Q3 2015, there were just over 26,712 court orders to evict tenants. This may be due to arrears or the landlord could be intending to sell the property. However, the number of evictions via the courts has fallen from the previous quarter by 4.3%. And when seasonally adjusted, it’s 7.8% lower than the same quarter in the previous year. 

According to Adrian Gill, Director of Your Move, “In the context of resurgent tenant arrears, landlords are the buffer delaying a parallel peak in evictions. And healthy landlord finances make that tolerant approach more likely. So while penalising landlords may win easy political points, making investment in new homes to let harder could be counterproductive.”

For more information on trends in tenant and landlord finances, read our latest ‘Tenant Arrears Tracker’.

If your tenant is not paying you rent, then you need to act immediately, so contact your local Your Move branch and also check your current insurance to see if you are eligible for a payout. 

Your Move Rent Protection and Legal Cost Insurance Scheme – guaranteed peace of mind.

Our Rent Protection Insurance scheme** gives you:

  • Up to 6 months' rent - with NO EXCESS to pay. The rent is 100% guaranteed, if your tenant defaults until vacant possession is obtained, or your property is re-let (whichever is the sooner).
  • Legal fees up to £15,000 for legal costs arising from regaining possession of your property from a tenant (providing they are in arrears).
  • Hotel accommodation for you for up to 30 days - to a maximum of £100/day (if your tenant has not vacated by the agreed date and the rental account is in arrears and you wish to move in to the property).
  • No forms for you to complete - telephone based advice and application.
  • Automated claims - no need to notify insurers or complete claim forms.
  • The backing of one of the largest insurers in the UK - the policy is provided by AVIVA.
  • Peace of mind.

When you choose either the Your Move Rent Collection or Your Move Fully Managed Lettings Service you can take advantage of our complete protection.

For more information call us on 01392 849 758^.

**Please note for these insurance products terms and conditions apply. You will receive a full policy document upon application. This policy will set out the terms, conditions and limitations of cover provided under the plan.