by Mark Johnston
Rents rose again in January 2012 due to an unusually high number of tenants looking for a limited number of properties, according to latest data.
It seems that the rental market burst back in to life unseasonably early, with potential tenants taking advantage of what is usually a quieter period for the rental market.
LSL property services, which owns the UK’s largest lettings agent network, figures showed that in January 2012 the average rent in England and Wales increased by 0.1% to £712 a month, this equates to an annual rise of £30.
An increasing proportion of the tenant population is comprised of financially secure but frustrated buyers who are able to absorb the increasing costs of living and rental inflation. Annual wage growth is just 1.6%, meaning that rents are still outstripping wage growth.
However there are a growing number of tenants that are now facing severe financial problems and are unable to keep up with their rental costs.
David Brown, commercial director of LSL Property Services, said “non-payment of rent is a landlord’s worst nightmare. A tenant in severe arrears means that an investor does not receive the rental income needed to pay the mortgage”.
According to a recent buy to let index, in March 8.7% of all rent was late or unpaid and an average of 94,400 tenants were more than 2 months behind with their rent payments. These figures are largely unchanged from December 2011, but they are above the average for the previous 12 months.
Many experts in the rental market have suggested that this figure is likely to hit 100,000 by the end of the second financial quarter.
Recent reports have also shown that the annual growth in tenant arrears has been matched by a yearly rise in the number of tenants being evicted through court orders.
If tenants do find themselves getting in to arrear with their rent or think they may be unable to pay their rent in the future they should act quickly to avoid losing their home, so first port of call is either the letting agent or landlord.
Kevin Still, director of Atlantic Financial Management, stated “as a debt solution provider, working with landlords and residential letting agents is important and many simply want to ensure the rent continues to be paid whilst rent arrears are cleared over a sensible repayment period rather than evicting the tenant”.
However, it seems that they may be some good news, according to the Association of Residential Letting Agents (ARLA), there are signs that private rents could soon level out.
Tim Hyatt, the president of ARLA, said “our data suggests that things could be changing in the private rented sector as the amount being charged for rent is beginning to stabilise in some parts of theUK”.
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