Arrears rising as Omicron hits tenants across rental sector

Propertymark says arrears in the private rental sector are rising once again as the Omicron variant continues to push across the country.

“Looking towards the sector’s immediate challenge as the pandemic rears its head once again, the unfortunate reality is that we may see an increase in the number of renters falling into arrears. It is therefore vital that vulnerable tenants are adequately supported during this time” explains Propertymark chief executive Nathan Emerson.

This turn for the worse follows evidence gathered by the trade body that landlords are in any case exiting the sector.

“Our latest survey has shown a rebound in tenant demand following two consecutive months of decline. Many landlords are aware of how difficult this year has been for tenants and as a result we are seeing rent increases fall for the second month in a row” continues Emerson.

“The private rental sector - which makes up a significant amount of the UK housing stock - is facing the reality that many landlords are increasingly considering an exit from the market. A key focus for the government in the New Year needs to be how to incentivise more landlords to remain in the sector and attract new interest in the market.”

His comments come as Propertymark reports that the average number of new prospective tenants registered per branch rose in November to 82, up from October’s figure of 71.

Regionally, the East Midlands had the highest number of new tenants registered per branch with an average of 134. This number was lowest in Wales where there was only an average of 26 new prospective tenants registered in November.

Meanwhile the number of tenants experiencing rent increases fell for a third month in November, as 58 per cent of agents saw landlords increasing rents compared to 68 per cent in October. This is the lowest rate increase since February, where rent increases stood at 49 per cent.

The number of properties managed per letting agent branch increased from 196 in October to 212 in November.

Year-on-year this is slightly lower than during October last year when the figure stood at 214.

Regionally, Scotland had the highest number of properties managed per letting agent branch with a figure of 304. However, rental stock was the lowest in Wales with an average of 106 properties managed per branch.

The number of tenants successfully negotiating rent reductions increased from 0.8 per cent in October to 0.9 per cent in November - this is the lowest number recorded in the month of November since records began.