The number of tenants finding themselves in severe financial difficulty has climbed by 8% in the second quarter of 2012.
Over 7,000 more tenant’s, are over two months in arrears, than there were in the first three months of 2012, according to the latest Tenant Arrears Tracker by chartered surveyors Templeton LPA.
In the second quarter of 2012, an average of 100,400 tenants in England and Wales were in severe arrears – an increase of 24% compared to a year ago. This is the highest number on Templeton LPA’s records, which go back to 2008.
Paul Jardine, director at Templeton LPA, said: “As the private rented sector grows, the number of tenants in dire financial straits is steadily increasing; falling wages in real terms have been compounded by rising rents, pushing a greater number of rented households over the edge financially. With the instability in the labour market and wider economy, and public sector cuts still to come, the section of renters in multiple months of arrears is likely to continue its expansion.”
Although the number of severe arrears cases (tenants with arrears of more than two months) continues to climb, the general level of tenant arrears across the entire market has improved, with 8.9% of all rent in the Private Rented Sector (PRS) late or unpaid by the end of May, a decrease from 9.9% at the end of April.
The increased number of tenants in severe arrears has driven a rise in the number of tenants facing eviction through court orders.
In the first three months of the year, 26,060 tenants faced eviction notices, 6% more than in the previous three months, and 5% more than in the same period of 2011.
A report from housing and homelessness charity Shelter last month showed that calls to the charity about problems with deposits have surged by over 80% in the last two years.
Kay Boycott, Director of Campaigns, Policy and Communications at Shelter, said: “This is yet more evidence of the crushing impact that rising rents and stagnating wages are having on family finances. Shelter research found that average private rents are now unaffordable for working families in over half of England, with many paying up to half of their income each month. And with home ownership out of reach for so many, hundreds of thousands of families are beginning to realise that renting looks set to be a way of life, not just a temporary stopgap.”
Legal 4 Landlords spokesman, Sim Sekhon commented on the increasing number of tenants facing eviction due to financial hardship stating “Landlords are able to put themselves in a position to help tenants avoid financial difficulties, especially when it comes to making sure that the rent is paid. If the landlord puts the applicants forward for tenant referencing then the landlord and tenant can obtain Rent Guarantee insurance to ease the stress and worry caused by making financial ends meet every month, in fact rent guarantee eases some of the financial pressures all round and if more landlords made use of such insurance products then the published eviction and rent arrears figures would make happier reading”.