New research shows, in the UK the number of tenants in severe arrears has risen

Research shows, over the last 12 months severe arrears in the UK’s private rented sector has reached 20% above the long term average and eviction are also up.

According to the latest Tenant Arrears Tracker by LSL Property Services, the number of tenants in arrears have increased, backtracking much of an improvement in the previous quarter.

In the first quarter of 2013 the number of tenants more than two months behind on their rent increased by 4.8%. This topples much of the improvement in severe arrears seen in the final quarter of last year, when the number of most severe cases had decreased by 14.5%.

In complete terms, the number of tenants in severe arrears increased by 4,000 to 94,000 in the first 3 months. Leaving the quarterly figure the fourth highest on record, only 10% below the record set in the third quarter of 2012.

On a yearly basis, the number of tenants in severe arrears stays down slightly, by 2.9%. Yet, over the past 12 months the level of arrears is now 20% above the long term average. In
England and Wales such tenants represent 2.3%, up from 2.2% the previous quarter.

The figures also show the extent of strained tenant finances which are shown in a rise in evictions, with court orders up 5.7% in the fourth quarter of 2012.

In the last three months of 2012, some 25,286 tenants faced eviction notices, which places evictions at the highest level ever recorded in an individual quarter, and 10.2% higher than a year before.

While severe arrears cases have got worse, there was a broader improvement in tenant finance. According to LSL’s latest Buy to Let Index, generally tenant arrears dropped in February, to levels not seen since November 2012, with 7.4% of all rent late or unpaid. In comparison with 8.1% in the previous month, and 10.1% in December.

Paul Jardine, director and receiver at Templeton LPA said, ‘Household finances are feeling the impact of spiralling costs, particularly energy bills, which were recently predicted to grow by an average £214 this year. And wallets are under pressure from the other side. According to the ONS wages are creeping along at 1.2% annual growth, well behind a rebounding rate of inflation. Many tenants have finally pulled their finances back together after the strain of the festive period. But for a significant minority the situation is actually much worse than three months ago, and this is reflected in the most severe tenant arrears.’