Rising rents result in more tenants in rent arrears
For the first time in 19 months, every region of England and Wales has seen annual rent increases, according to latest figures from the Buy to Let Index.
It is of no surprise that London saw the largest annual increase (7.6%). Slightly more surprising was Wales who came in second (5.0%) followed by the East Midlands (4.1%). Rents are now at their highest level since November 2012.
However while rents continue to soar, wage rises remain sluggish, seeing an annual growth of just 1.2%.
As a result an increasing number of tenants have once again found themselves in severe rent arrears.
In the last three months of 2012, the most severe cases of rent arrears had actually fallen by 14.9%. By the end of March 2013 this number has risen again by 4.8%, or 4000 cases, as tenants begin pay the price of the festive period.
There are now 94,000 tenants in severe rent arrears (owing more than two months rent).
Rob Denman, Head of GW LET, comments:
“These figures are understandably a growing concern for all landlords.
“At the end of 2012, over 25,000 tenants received eviction notices - around 10% more than the previous twelve months. If this activity continues then we are likely to be in for a similar increase a year down the track.
“If a landlord wishes to evict a tenant in rent arrears, they must serve a Section 8 Notice. Should the tenant refuse to vacate the property, a landlord must obtain an order for possession from the court before enlisting the help of the court bailiff.
“It is essential a landlord follows these formalities even if the tenant refuses to leave. Believe it or not failure to do so could actually give the tenant the opportunity to claim compensation against you whether they are in rent arrears or not. Anyone even slightly unsure about the process should contact our team for further help and advice.”
Content correct at time of publication