Rent Arrears – Top worry for landlords and tenants right now

News at Justin Lloyd | 11/10/2022

A survey of 12,000 tenants suggests that over three-quarters are concerned about the impact of the cost of living crisis on their ability to pay rent, and a survey of 1,000 landlords conducted in parallel shows that renters’ ability to pay rent is the number one concern*

Rent accounts for an average of 30.5 per cent of a renter’s gross monthly income in the UK, ranging from 23 per cent in Northern Ireland to 34 per cent in London.

The survey found that over three quarters of renters feel inflation will have a moderate to a significant impact on their ability to pay the rent.

One in four renters rank this as their top concern in the next year, closely followed by worries about landlords increasing rent.

Just 11 per cent of renters feel the cost of living crisis will have no impact on them.

Amongst landlords, 36 per cent have no plans to increase the rent on any of their portfolio over the next 18 months.

But 40 per cent are likely to increase the rent on one or more properties over the next year. Over half of these landlords are doing so to cover increased costs.

Landlords were more worried about arrears than about the abolition of Section 21 notices and other taxation or legislative issues.

HomeLet chief executive Andy Halstead says: “Many people in Britain are facing a financial crisis. We have the perfect storm, ramping inflation, interest rate increases and war in Europe that exponentially impacts utility prices.

“Landlords know the pressure on tenants, but many landlords must increase the rent because the cost they face is growing.

“Landlords and Tenants are people; both groups are equally affected, as our letting agent businesses. Add to this crisis the government interventions, which make life even more difficult for all concerned in the rental sector.

“The rental market plays a critical role in satisfying the UK’s housing needs; there simply isn’t enough housing stock. Many landlords are choosing to exit the market, which only causes further strain on stock levels and letting agent businesses.

“The government’s commitment to legislation in the market through the Renters’ Reform Bill will provide the most significant change to rental law in a generation, and I can’t see any positives.”

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*The studies are from HomeLet with Dataloft: Original article from Landlord Today.