Our latest Tenant Arrears Tracker showed that despite an improving economy, the number of tenants in arrears is on the rise.
In Quarter three 2015, we saw the number of tenants seriously behind on rent rise by 13.8%. There are now over 84,000 tenants more than two months behind in rent payments, compared to 74,000 in the previous quarter. Year on year the picture is worse with over 13,000 households seriously behind in rent, an increase of over 18%.
Part of the rise though is due to the growth in the number of people renting. To put these numbers in context, it means 1.6% are in serious arrears of more than two months in Q3 2015 and this compares to a peak of 2.9% during the credit crunch in Q1 2008.
Interestingly, despite the rise in the number of people in rent arrears, we saw just over 26,712 court orders to evict tenants which is 4.3% lower than the previous quarter and when seasonally adjusted 7.8% less than the year before in Q3 2014.
According to Adrian Gill, Director of Reeds Rains, “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 paying your rent, then you need to act immediately, so contact your local Reeds Rains branch and also check your insurance to see if you are eligible for a payout.
Rent protection insurance from Reeds Rains
Our Rent Protection Insurance Scheme** - backed by one of the largest insurers in the UK, Aviva - is one of the few on the market with the following benefits:
- Up to 6 months' rent 100% guaranteed (subject to deductions as defined in the policy) - there is NO hidden excess for you to pay 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 up to 30 days in certain circumstances 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).
- Automated claims - no forms to complete.
- Peace of mind.
This product is available to you if you take out our Rent Collection Service or Full Management Service. Click for more information about our landlord service levels.
**Terms and conditions apply. This information if a summary only. You will receive a full policy document upon application, which will set out the terms, conditions and limitations of this product.