Landlords around the UK are seeing the number of tenants who are in serious rent arrears beginning to fall, according to a tenant arrears tracker.
The data from estate agents Your Move and Reeds Rains reveals that in the fourth quarter of last year, around 1,500 tenants moved out of serious rent arrears compared to the third quarter.
The tracker reveals that this is a 1.5% improvement over the quarter and is a reverse of the worst arrears trend seen in early 2015.
When all private rented households are taken into account, just 1.6% are considered to be in serious rent arrears.
In comparison, in the first quarter of 2008 there were 2.9% of tenants in serious rental arrears which was a record high.
‘Unlikely an individual tenant will fall into serious rent arrears’
Adrian Gill, a director of Your Move, said: “It’s extremely unlikely an individual tenant will fall into serious rental arrears and the proportion of those renting who get behind on rent payments has dropped considerably.
“The numbers are going the right way too and there are fewer people at risk from the consequences of not paying their rent which is great news.”
Alongside this, the research also reveals that the number of landlords who are behind on their buy to let mortgage repayments is also in decline.
In the last quarter of 2015, 5,500 landlords suffered with mortgage arrears, a drop from 3.5%, or 5,700 landlords, who were in the same state in the third quarter.
When compared to the final quarter of 2014, there were nearly 12,000 landlords struggling with mortgage arrears which reveals a fall of 54% within a year.
However, despite finances for landlords improving, there is still uncertainty within the sector about the changes to the tax regime and increase to stamp duty.
Tax changes are not deterring new landlords
Meanwhile, it has been revealed that landlords have not been deterred from investing in buy to let property despite the upcoming tax changes and increase to stamp duty.
The findings come from Shawbrook, a specialist lender, who say that 56% of landlords are looking to buy within the next year.
In addition, around 40% of landlords are looking to create a limited company for their property portfolio to help protect them against the tax changes.
Landlords are looking to increase their rent
The findings also reveal that one in three landlords are looking to increase their rent this year.
The firm’s director of commercial mortgages, Karen Bennett, said: “It seems there’s optimism amongst property professionals and we are expecting the market to remain buoyant.”
