67,000 households more than two months behind with rent

Rent due

The number of tenants more than two months behind with their rent increased by 2,000 in the last three months of 2013.

There were 67,000 households found to be in 'severe arrears', according to analysis by LSL Property Services, which was an increase of 3.4% compared to the previous quarter, when the number had fallen significantly.

Despite the "setback" in the final quarter of the year, LSL said that over the course of 2013, the number of those more than two months behind with the rent actually fell by 20%, and that the fourth quarter figures were still the second-best for tenant finances in two years.

In the final three months of last year, 26% fewer households were in severe arrears compared to the same period a year earlier.

According to LSL's latest Buy-to-Let Index, overall tenant arrears also fell in November, with 6.6% of all rent late or unpaid, compared with 7.1% in October.
Paul Jardine, director of LSL's receivership business Templeton LPA, said: "Economic prospects appear to have transformed since this point last year, with a pervading confidence taking hold.  But households are still heavily indebted, and wages are only starting to very dimly reflect a brighter economic picture.  

"After a year of dramatic changes, the closing stages of 2013 have been no less intense for anyone struggling with the monthly rent. For many people the festive period has provided a particularly difficult ending to a long and challenging year."
However, he is relatively optimistic about their prospects in 2014. He added: "Even with the strains of Christmas and New Year, severe rental arrears are in a much better state than they were just six months ago. That could point towards fewer people facing eviction in months to come."
But for the time being, eviction numbers are rising. The number of tenants facing eviction through court order rose in the third quarter of 2013 to 30,807  – up 11% from 27,784 in the second quarter.

So should landlords be worried?

Not overly, says LSL. In a statement, the property company said: "Landlords have continued to benefit from overall improvements in the financial position of tenants, with landlords' own mortgage arrears falling for the fourth quarter in a row, continuing a long-term improvement.

"By the end of the third quarter of the year the number of buy-to-let mortgages over three months in arrears stood at 17,500, down 1.1% since the first quarter. This brings the number of buy-to-let mortgages more than three months in arrears to the lowest level since 2008, after falling by 20.1% over the course of 2013."
Paul Jardine advises any landlords whose tenants are finding it difficult to pay the rent to "keep communicating".

He said: "No two tenancies are the same, and when difficulties do arise, having the best information to hand is vital to finding the best course of action for everyone involved."

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