Tenant Arrears Up in March 2016
A survey of 20,000 properties in England and Wales by Your Move and Reeds Rains has shown an uptick in tenant arrears for March 2016. Whilst the overall increase is modest, up from 8.8% in February, to 9.1% in March, it does indicate a squeeze on tenant finances as rental levels continue to rise. Annual rental inflation is now running at 3% with average rents payable across England and Wales standing at £791 per month. However, the past two months have shown relative stagnation in rental increases.
The year on year comparison is also unfavorable as this time last year, the March 2015 rental arrears rate stood at 7.4%. Despite this, the survey indicates a more encouraging trend as the current rate of 9.1% is still well down on the high of 14.6% of all rent payable recorded in February 2010.
Clearly, the requirement to manage arrears is as important as ever and close monitoring of downstream issues will prevent arrears becoming onerous for either landlord or tenant. In the first instant, it means striking an equitable, affordable deal.
Adrian Gill of LSL commented: “Good landlords also understand that their interests and the interests of their tenants are aligned – a tenancy should be a mutually beneficial deal. That takes expertise in managing a property and it takes commitment. The growth of private renting has changed society in terms of the number of people who are tenants, but it has also raised questions for those who now find themselves as landlords, either purposefully or in some cases through a relatively unplanned course events”
Jo Green of SLC commented: “Whilst a tenant falling into arrears is not ideal, it’s important to have a strategy and deal with the situation as swiftly as possible to prevent the arrears becoming onerous for both landlord and tenant. The survey is good news for the industry and shows that the trend is broadly down. Strategies implemnted by SLC on behalf of clients, mirror the statistics in the survey and are clearly having a positive effect to the benefit of landlords and tenants alike, preventing arrears getting out of hand.”
*Graph courtesy of Your Move and Reeds Rains