Private sector rent arrears show dramatic rise

A total of 74,000 private sector tenants owe more than two months’ rent - this is up 4.4 per cent in the past three months and is 7.2 per cent higher than a year ago.

The figures, from Your Move and Reeds Rains, translate into 5,000 more households being in significant arrears today than this time last year. 

However, the agencies stress that the recent worsening in the number of tenants in serious difficulties remains relatively mild by historic standards. 

In the worst peak of serious rent arrears, seen in the third quarter of 2012, some 116,600 households owed more than two months in late rent.

The chance of a tenant falling seriously behind on rents is still extremely low. As a proportion of all tenancies, those in severe arrears represent just 1.4 per cent of all tenants - relatively stable compared to the previous quarter and the same as a year ago.  

This compares to 2.9 per cent of tenants in early 2008, even before the worst of the financial crisis and recession.

“Most households are beginning to earn more, and it is this majority of tenants who are able to bid up the price of rented homes in the face of constricted supply. Rents are accelerating in response – rising by more than five per cent over the last year"
explains Adrian Gill, director of Your Move and Reeds Rains. 

“But .... for a small minority there has been no transformational boost to household earnings and it is this more marginal population of tenants feeling the squeeze of rising rents most sharply. Severe arrears are still much lower than their previous peaks but a lack of further progress highlights the underlying and fundamental supply shortage" he says.