According to the latest Tenant Arrears Tracker by LSL Property Services, the number of tenants in the UK who are classed as in severe arrears (more than two months) has fallen from 102,000 in the second quarter of 2013 to 67,000 in Q2 2014 – a 35% reduction.
This improvement means that just 1.5% of tenants in the private rented sector have been unable to avoid serious rental arrears, compared to 2.2% a year ago.
Overall arrears (of any duration) are also down, according to the latest Buy-to-Let Index, having fallen from 8.2% in May 2013 to 7% in May 2014.
Landlords have felt the benefit of this fall in tenant arrears, as shown in their own fall in mortgage arrears for the sixth consecutive quarter. Buy-to-let mortgages in arrears of more than three months have fallen to 14,700 – an improvement of 10.9% from the previous quarter. On an annual basis, buy-to-let mortgage arrears have improved by 17.9%.
The figures highlight the close financial tenant-landlord relationship. Improved tenant finances bolsters landlord confidence in the future of the rental market, increasing their willingness to invest in new homes to let.
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