Private landlords are seeing the number of tenants with severe rent arrears fall for the first time in a year.
Defying a 10% quarter-on-quarter increase since the last three months of 2011, the figure dropped almost 16% from 102,000 to 86,000 at the end of 2012.
The drop means 2.2% of the 3.9 million private rented homes in England and Wales are three months or more behind with rents.
In straight numbers, that’s 85,800 buy to let homes with severe rent arrears.
More private tenants are paying their rents on time, even though the figures tend to dip around Christmas to account for seasonal spending.
Evictions up
In December 2012, 7.4% of all rent was late or unpaid, compared with 8.1% in November, according to Templeton LPA, a company that tracks buy to let rent arrears
Director Paul Jardine said: “The recent strength of the labour market has played the biggest role in halting the upwards climb in the number of tenants in severe financial difficulty.
“Unemployment has fallen dramatically, so fewer households have seen their monthly income halted and their ability to meet the monthly rent cheque hampered.”
Despite the improvement in paying rent, almost 26,000 tenants were served with eviction notices in December 2012, a rise of 5.5%.
Nearly 22,000 landlords were three months or more behind with their buy to let mortgages at the end of the third quarter of 2012 – up 0.9% compared to a 9% fall in the previous quarter.
Mortgage rates to fall
“After a year of increasing severe arrears, landlords are more aware of their legal protection than ever, and a more proactive approach to tackling arrears has helped rein in severe tenant arrears,” said Jardine.
Jardine also reckons cash flow will improve for private landlords as government schemes to aid homebuyers push down home mortgage rates, which should see lower buy to let mortgage rates for landlords.
