Four in five landlords see no arrears increase
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Just 16% of landlords have seen an increase in arrears in the last year, LSL Property Services reveals.
Despite fears over the impact of the recession, and six consecutive months of rent rises, 84% of landlords saw arrears remain stable or fall in the past 12 months.
A total of 11% saw only a slight increase in the number of tenants in arrears.
The average UK rent of those in arrears was £472 per month in July – 30% lower than the average monthly rent.
In July, £213m of rent was unpaid, according to LSL’s latest Buy-to-Let Index – the lowest figure since the group began compiling the figures over two and a half years ago.
This amounts to just 9% of all rent across the UK, down 2% from a year ago, the same as in June 2010 (11%).
David Brown, commercial director of LSL Property Services, comments: “With the labour market remaining relatively strong, most tenant finances have been in better shape than expected - keeping the overall arrears across the UK down. But a minority of landlords have experienced an increase, driven by lower income tenants renting out cheaper accommodation.
“Those who suffered first from the recession were those in lower paid jobs, often the most disposable workers when employers look to cut. Even so, a changed tenant mix has improved the arrears picture for many landlords. Thousands of would-be first-timers are remaining in the private rental sector. These are generally more financially stable, and able to meet higher rents on time.”
A quarter of landlords say they now move much more quickly to combat arrears.
In July, just 2% of all UK tenants in the UK were late by two months or more with their monthly rent, its lowest since April 2009.
Brown adds: “Landlords are no longer focussing on capital gains for their profit – they are more conscious of the value of rental income. Now landlords are reacting more quickly to any situation that may hamper their cashflow – before tenants fall into sever arrears.”
He also believes that with mortgage finance tight there will be a glut of financially robust tenants who will keep arrears performing well.
LSL research also shows 82% of landlords have experienced less than four weeks without a tenant in the last year.
