Number of renters in severe arrears hits 98,000; evictions at record levels
Cases of severe arrears rose by 3.3% on a quarterly basis bringing the figure to the third highest level on record, with only the second and third quarters of 2012 seeing any worse.
While still a small minority, those in serious arrears now represent 2.4% of all tenancies in England and Wales, up from 2.3% in the previous quarter.
On an annual basis, the number of tenants in severe arrears has shown a slight improvement, falling in absolute terms by 2.9%. However this leaves severe arrears over the last 12 months 20% above the long-term average.
While severe arrears cases have worsened, there was a wider improvement in tenant finance.
According to LSL’s latest Buy-to-Let Index, overall tenant arrears fell in May, with 8.2% of all rent late or unpaid. This compares with 8.4% in the previous month.
Paul Jardine, director and receiver at Templeton LPA, comments: “Tenants as a whole have already shown great resilience to set-backs, and we expect the proportion of all rent in arrears to halve between 2008 and 2018. But a troubled minority is feeling the pinch most sharply. Slower rent rises in the last couple of months have provided some relief. However, the longer-term battle is with other forms of inflation, plus unemployment and anemic wage growth. Consumer inflation is persistently outpacing the Bank of England’s target, and escalating much faster than either rents or wages.”
Reflecting a growing minority of tenants experiencing serious financial strain, the number facing eviction through court order has also grown.
In the first three months of 2013, 28,473 tenants faced eviction notices, a quarterly rise of 4.9%. This puts evictions at the highest level ever recorded, beating the previous record set only in the last quarter. Evictions in the first quarter were 9.4% higher than the same period last year.