During the last year, the number of tenants who are struggling to pay their rent has risen by a quarter, according to new figures compiled by industry insiders. The rental market is booming at the moment, so rents are higher than ever and more people are finding themselves getting into arrears with their landlords.
The report claims that more than 100,000 people are in significant arrears with their rent. That means there are 100,000 tennants who are more than two months behind with their rent, which is around 24% higher than this time last year.
Facing eviction because of debts
The amount of renters who were facing severe, wider financial difficulties were up by 8% during the second quarter of the year. There are several different factors that appear to be contributing to this increase in tenants who are unable to pay the bills. Average wage rises are moving behind inflation, which means that many people are left out of pocket as goods and services cost more, without pay rising quickly enough to pay for the difference. This has left many tenants paying out more money and getting into more financial difficulties as a result.
There was also a 6% increase in the amount of eviction notices issued by courts when compared to the 2011 figures. This is a stark illustration of how hard it is to solve debt problems once they are out of control.
Rental arrears are a worrying trend in the industry
Paul Jardine from Templeton LPA said “As the private rented sector grows, the number of tenants in dire financial straits is steadily climbing. 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 number of tenants in multiple months of arrears is likely to continue its expansion.”
Problems paying rent could continue
This situation is tough on both the people who are renting property, and the landlord who is struggling to collect rent. It is easy to see why credit agencies are taking the first steps towards including rent in an individual’s credit history. David Brown from LSL Property Services said: “In this environment, late or non-payment of rent is even more of an issue for investors, and it’s not uncommon to see landlords be flexible on the rent at the outset of a tenancy to secure a tenant with the strongest evidence of sound finances and affordability.”
With the current discrepancies between the average wage increase and the rate of inflation, there could continue to be growing numbers of individuals and families who are unable to pay the bills. If you are facing problems paying rent, or you are in any other form of debt, you should find professional help as soon as possible. Get in touch with experts to get advice on how to get out of debt and get on with your life.