Buy to let rent arrears are up as tenants feel the strain of rising rents and the soaring cost of living.
Landlords are owed around £300 million in unpaid rent for August – about 11 per cent of all rents due, according to LSL Property Services, the country’s biggest letting agent.
The figure was 19.5 per cent up on July’s arrears of £251 million.
Rents and inflation were both up in August, putting a strain on the money tenants had to pay rent, but David Newnes, managing director of LSL Property Services blames tenants paying for summer holidays for part off the shortfall.
Rents hit a record high of of £713 per month, around £8 up on the previous record of £705 in July and reflected the largest monthly payment increase over the past 12 months.
Inflation was also up to 4.5 per cent, with rising clothing and energy prices contributing the most to the figure, while more energy prices are to come this month.
“The holiday season often takes its toll on tenant arrears, with many households squeezed by summer holiday spending. While we expect arrears to fall back into line in the short-term, the growth is indicative of the mounting pressure facing tenants,” said Newnes.
“With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long-term we anticipate that rental arrears will become a growing financial problem for landlords.”
LSL Property Services, which owns nationwide chains of letting agents like Your Move and Reeds Rains, also disclosed average yields were up to 2.6 per cent.
Although average rents are rising – the figures vary between regions, with the West and South Wales see falls of 0.4 per cent while every other area registered an increase.
Wales and the South East saw the largest monthly rises (both up 2.1 per cent); followed by London (up 1.5 per cent) and the South West (up 1.3 per cent).