by Mark Johnston
Rent Arrears at the Start of 2013.
It appears that in most areas of the country they average rent actually fell for the second consecutive month in December 2012, dropping 0.9 per cent in most areas.
According to the latest buy to let indexes rent falls in December were merely due to landlords trying to avoid empty properties over the festive period.
However the fall in the cost of renting is as most experts believe, likely to be just a seasonal ‘blip’ rather than a turn about in the market as rent increases are fully expected in 2013. Rent is still 3.2 per cent higher than a year ago.
There is of course no doubt in some experts minds that rent will continue on their upward trajectory as demand continues to exceed supply.
Even if this is the case it would seem that even the current fall in rents was enough to offset the cost of Christmas on already strained households.
Amid one of the most difficult economies in a generation British tenants are once again falling further behind with their rent payments.
Despite the recent fall in rents, recent figures have revealed that rent arrears jumped to their highest level in nearly a year in December.
Some estate agents have stated that December always sees a step backwards and last month was no exception as the total amount of rent owed hit levels not seen since as least the previous Christmas.
An estimated total of £326 million, which equates to 10 per cent, in rent was either late or went unpaid, this amount is even a considerable increase on last years figures, according to a survey conducted by LSL Property Services.
Campbell Robb, chief executive of shelter, the housing and homelessness charity, said “this time of year is particularly difficult for many families as bills coming in from Christmas take their toll on finances already stretched to breaking point”.
With rising costs in living and wages still stagnant it is not surprising that rent arrears are at a high.
Current statistics reveal that over 100,000 tenants in the UK are now in severe financial difficulty which has increased by nearly a quarter on the same period in 2011.
David Brown, commercial director at LSL Property Services said “after 2 months of improvements the festive period has taken its toll on tenant’s finances”.
In the current economic environment late or non payment of rent now not only affects the tenant but also the landlord.
According to BDRC continentals, an independent market research consultancy, latest landlords panel, Britain’s smallest private landlords are now struggling with rent arrears.
ark Long, director at BDRC continental added that “it is a tough time to be a private landlord at the moment especially if you only own one property”.
With the governments new welfare ‘shake up’ also still on the cards some experts believe that rent arrears across the UK will increase by up to 50 per cent.
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