Rent arrears soar by 22%

Rent arrears soar by 22%

0:01 AM, 12th November 2024, About 23 hours ago

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Landlords in the UK have seen rent arrears soar with the average claim reaching £2,064 in the third quarter – a 22% year-on-year increase.

According to data from deposit alternative provider Reposit, this figure significantly eclipses the traditional five-week cash deposit, which averages £1,347.

That leaves landlords vulnerable to a shortfall of around £700 in cases of arrears.

Despite the rising value of arrears claims, the overall percentage of tenancies ending with outstanding rent has fallen seasonally.

‘Each arrears case is now exceeding £2,000’

The firm’s chief executive, Ben Grech, said: “The amount claimed for each arrears case is now exceeding £2,000, substantially outstripping the value of a five-week cash deposit and leaving landlords at risk from an excess cost of around £700 per claim.

“With the incoming Renters’ Rights Bill, landlords are becoming increasingly conscious about protecting themselves in cases of rent arrears, driving more interest towards deposit alternatives.”

He added that the number of tenancies ending in arrears of more than five weeks rent is now 17%.

Landlords are struggling with high interest rates

However, both tenants and landlords are struggling with high interest rates and increasing rents.

Reposit says that the cost-of-living crisis has exacerbated the situation, with 52% of UK households reporting increased costs in August 2024.

Landlords are feeling the strain, as evidenced by the latest UK Finance stats, which showed a slight increase in buy to let mortgages in arrears.

Tenants, too, are facing challenges, with the number of available rental properties at a 15-year low.


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