Rents rise again in April but rent arrears climb

Latest Landlord News by: Madalena Penny

Rents increased again in April, according to latest data captured by LSL property services.  In their most recent Buy-to-Let Index, LSL recorded a 0.8% rents rise across average rents in England & Wales, a rise averaging out at £692 per month for a typical property.

As you would expect, London saw the highest increase, with rents increasing to £988 per month, followed in similar vain by the South East.  As was the case in March this year, only the east of England is reporting a decline, with properties now fetching a modest £709 per month.

But it’s not just the rents that are-a-rising, tenant arrears have already began to climb in April with an increase of 2.4% up on March.  Consecutive bank holidays have been blamed for the increase in the additional £60m arrears marked up from the previous month’s £224m.  At the close of April, 11.8% of all UK rent had fallen into arrears.

It seems the average private tenant is either

a: struggling to meet rental payments;

b: not bothered about rent obligations;

c: all of the above.

……answers on a postcard please!

The NLA (National Association of Residential Landlords) have also offered their own snapshot of landlord opinion and stats for the private sector through a study conducted with just short of 600 landlords.  A surprising 52% of landlords they surveyed had experienced rent arrears within the past year with the average tenant owing £730 in late rent payments.  If figures were applied to a wider context incorporating all UK landlords operating in both the private and public sector, this would be quite an alarming number.  With introductory caps already in force and blanket caps on housing benefit proposed for January, landlords are advised to keep an eye on rent arrears and act fast.

Higher rents due to increasing demand for rental accommodation appear to be hitting the average tenant hard and landlords need to ensure their income.  Whilst keeping rental prices to an achievable level is by far the more sensible method to avert arrears and reduce void periods, advises ‘Legal 4 Landlords’.  The landlord legal eagles also advise application of ‘an arrears’ strategy to effectively deal with defaulting tenants to be instigated through immediate communication with said tenant.

As with any good advice, it only works if acted upon…..landlords take note!