Severe tenant rent arrears have fallen by a third in the last 12 months, according to a new report.
The number of tenants behind on rent by more than two months has fallen from 105,000 in the first quarter of last year, to 68,000 in the same period in 2014, a 35 per cent drop.
According to LSL’s latest Buy-to-Let Index, overall tenant arrears have fallen to the second lowest level on record, with only 6.9 per cent of all rent late or unpaid as of February, compared to 7.4 per cent of all rent in the previous month and 9.7 per cent in December 2013.
Those owing more than two months’ rent represent 1.4 per cent of all tenancies in the UK, down from 2.3 per cent of all one year ago. The improvement comes despite an 11.1 per cent seasonal increase in cases of severe arrears between the end of 2013 and the beginning of 2014.
LSL’s tenant arrears tracker also found that the number of tenants facing court-ordered evictions saw a decrease of 3.4 per cent at the end of the last year, falling from 31,380 to 30,324 this year.
A buoyant mortgage market and improvements in the financial position of tenants has been credited with a fall in landlords’ own mortgage arrears standing at their lowest level for six years, with the number of buy-to-let mortgages in arrears falling 4.6 per cent to 16,500 at the end of 2013 compared to the third quarter of the same year.
Commercial director of LSL Property Services, David Brown, said: ‘Not only is this great news for tenants and landlords, but such an improvement will ripple out to the wider economy. The incentive for investment in the private rented sector is already growing on the back of solid rental yields and gathering capital accumulation — but now lower risk is proving to be the cherry on top for potential investors.’