The
number of court orders to evict tenants is up 9% in
the last year, and look set to rise further. The number
of tenants in severe rental arrears is up by 13%.
However, the impact of tenants’ arrears has
yet to filter through to landlords, with total buy-to-let
mortgage arrears cases falling by 12% in the last
year.
According
to research by Templeton LPA, which acts as a receiver
of rents for lenders whose landlords have defaulted,
the number of tenants in severe financial difficulty
has climbed rapidly in the last quarter. It says there
are now nearly 8,700 more tenants over two months
in arrears.
Some
74,492 tenants in England and Wales are in severe
arrears – a 13% increase compared to the same
time last year. This also represents an increase of
4% compared to 71,483 in the previous quarter. Nevertheless,
tenancies in severe arrears represent just 2.1% of
all properties in the private rental sector in England
and Wales.
The
growth in tenant arrears has been mirrored by a rise
in the number of tenants being evicted through court
orders.
In
the last quarter, 24,170 tenants faced eviction notices
– an increase of 9% on the 22,091 a year ago.
But the change is not just annual. In Q1 2012, there
were 5% more than in the last quarter of 2011.
Paul
Jardine, director and receiver at Templeton LPA, said
rising rents were helping to fuel the increase in
arrears. He said: “There’s no denying
that tenant finances have been under mounting pressure
in the last six months. Rents have risen consistently
in the past year to a record high, and the cost of
living is taking its toll. This is causing many tenants
on lower incomes to fall further and further behind
with monthly payments. But with demand so strong for
rental properties, and rental income providing the
lion’s share of annual return at present, many
landlords are becoming less lenient with arrears,
and seeking court orders to remove non-paying tenants
before they themselves fall into mortgage arrears."
