The number of tenants in more than two months arrears to private landlords was up 1.6% to 99,000 in three months ending September.
Although numbers are still rising, the rate is slowing – from a rise of 4.6% in the second quarter, says Templeton LPA, a firm managing repossessed buy to lets for lenders.
The firm calculates tenants did not pay or were late with 9% of all rents, which is a slight drop in the amount of arrears against previous quarters.
Paul Jardine, director and receiver at Templeton LPA, said: “While the majority of tenants have shown a slight improvement in their ability to cope with the bigger rent cheques, the minority of renters who are months behind with rental payments is still expanding.
“Nevertheless, it’s encouraging news for landlords that the rate of growth is slowing. The labour market has held up well recently, and if it strengthens further, it may well keep a lid on the number of tenants unable to pay the rent in the short-term.”
Landlords seem keener to evict tenants despite the growing arrears problem.
In the second quarter, 25,422 tenants were served with eviction notices, a quarterly fall of 6% compared to the first three month of the year; however, evictions are 8% higher year-on-year.
The number of private landlords with buy-to-let mortgages more than three months in arrears dropped 7% to 22,000 by the end of the second quarter, compared with a fall of 4% in the previous quarter.
Year-on-year, the number of buy-to-let mortgages more than three months in arrears fell by 21%.
David Brown, commercial director of LSL Property Services, which runs the Templeton LPA brand, said: “Arrears management and prevention is a crucial consideration for any sensible property investment strategy. Landlords need to have a plan in place for identifying and tackling tenant payment problems early, or face the prospect of a property that is neither providing an income, nor able to be quickly filled.
“With this in mind, landlords should balance getting the best possible rental income from their property with making sure rental payments are affordable for prospective tenants in the long-term.”
