The latest figures, published in the Tenant Arrears Tracker from LSL Property Services, show that the number of private rented sector tenants owing more than two months rent has risen by 4% in since last year.
70,900 households now face severe rent arrears, compared to 69,400 in the previous quarter (an increase of 2.2%), and 68,200 a year ago.
Despite this increase, it still shows the vast improvement over where tenant finances were three years ago. In the third quarter of 2012, 116,600 tenancies faced more then two months rent unpaid. Over the last 18 months, however, when the low of 63,500 was recorded, there has been a slow, incremental increase.
Although the number of tenancies in severe arrears has increased, the proportion of total tenancies in severe arrears has not changed since last year, remaining solid at a minuscule 1.4%. This increase in numerical terms, therefore, is due to the increased number of people entering the private rented sector.
But it was also shown that the proportion of tenancies in arrears of any length actually fell from 7.6% to 7.4% between February and March 2015.
This is somewhat mirrored in the eviction rates. The report shows that they went up 2.3% in the last quarter, but are down 7.9% on an annual basis.
The report concludes that “the big picture is increasingly optimistic for landlords looking to grow their portfolio. The only caveat must be that there is still a very small chance that tenants will fall into financial difficulties. Landlords can’t discount that completely and need to keep lines of communication open and investigate any potential problems at an early stage.”