Figures released at the end of last year showed a decline in the
numbers of tenants more than two months behind on their rent
payments. This was good news for landlords as the same period in 2012
had been 50% higher than 2011. Unfortunately the situation has since
worsened and the average number of tenants in debt is up nearly 5%,
which means 2.3% of tenants living in England and Wales are very
behind on their rent.
Why are tenants falling into debt?
It is not uncommon for tenants to slide into debt over the Christmas
period. Rent is often seen as being unimportant when kids are
clamouring for expensive games consoles and extra food is needed.
Unfortunately, other factors are also at play.
Rise in the cost of living
As most of us cannot fail to have noticed, living in the UK is not
cheap these days. Food, fuel and energy all costs a fortune and with
wage increases well behind the rate of inflation, it is not easy to
make ends meet, particularly if you are living on the breadline
already. All it takes is one household emergency—a broken washing
machine or a large bill—and disaster strikes.
Benefit cuts
The government’s attempt to shrink the annual welfare bill is another
factor. Many tenants face seeing their Housing Benefit payments cut,
which will of course have a big effect on their weekly income.
Look on the bright side
It isn’t all bad news for landlords. Mortgage rates are exceptionally
low at the moment, so if you are ready to expand your property
portfolio and you have lots of equity, it should be easy to find
funding.
