Good News - Arrears at lowest level for six years says bank

Paragon Bank says the proportion of landlords with tenants in arrears has fallen to its lowest level since 2017.

The same applies to the current proportion of vacant rental properties.

A survey of over 750 landlords, carried out by BVA BDRC for Paragon, has highlighted how 32 per cent of landlords stated that they have had at least one tenant in rental arrears during the previous 12 months.

This is a dip from the 34 per cent in the previous quarter and marks the lowest level of rent arrears in six years, when the metric was first tracked in its current format.

Richard Rowntree, Managing Director for Mortgages at Paragon Bank, says: “It’s great to see that that the proportion of landlords experiencing tenants who are behind on their rent has fallen to the lowest levels since the metric was first tracked in 2017. 

“We do know, however, that the cost-of-living crisis will not impact tenants in the same way, and it is likely that paying rent will be a real challenge for some. From speaking to landlords, we also know that many have good relationships with their tenants and are often open to working with them to overcome any financial issues.”

The proportion of landlords reporting void periods during the previous three months also hit a low during this wave. 

Fewer than one in four landlords experienced a vacant rental property in Q4 2022 - again a decline since the quarter before.

During the same period, a drop from 82 to 70 days was also seen in the average void duration. Interestingly, the data revealed that landlords managing larger portfolios, those with 11 or more lets, tend to report having properties vacant for shorter periods of 44 days compared to average.

Rowntree adds: “It’s extremely encouraging to hear that voids reported by landlords are at their lowest level since 2017.

“This is unsurprising given the demand for privately rented homes, also at record levels. This adds further weight to the argument for investment in affordable housing across all tenures, something that buy-to-let landlords should be recognised for making an essential contribution towards.”