News
More landlords taking action against tenants in arrears
Feb 1, 2012
Category: Landlord and Tenant
Court orders to evict tenants rose by 11% in 2011 as landlords took a firmer stance
against late payers.
Figures released by the specialist receivers, Templeton LPA, also show that the number of tenants in “severe arrears” of more than two months rose by 18% last year to 78,970.
That’s the highest level since the third quarter of 2008.
Paul Jardine, director and receiver at Templeton LPA, said: “The soaring cost of
renting has created a two speed market. The overall tenant population has coped
relatively well with rising rents and soaring living costs, with total arrears
actually down year on year in November. But a growing minority of renters are
falling deeper and deeper into payment difficulties, and the number of severe
arrears cases is rising.
“While the wider tenant mix has changed since the mortgage market downturn with a greater
number of financially sound yet frustrated first time buyers, a growing number
of tenants are seeing their job prospects affected by the UK’s economic
malaise.
“As a result, many landlords are being less lenient with tenants facing initial
payment problems and are looking to use court orders to replace tenants quickly
in anticipation of finding a financially sound substitute and potentially an
increase in rent.”
Mr Jardine said that so far, rent arrears had not led to severe mortgage arrears for buy to let landlords, but that could change if the economic climate does not
improve.
“We expect that mortgage arrears will climb. Given the economic challenges the UK faces, and the worsening labour market, we anticipate that both overall arrears and severe arrears will rise in 2012 – and this will feed into increased tenant evictions and hamper a growing number of landlords’ ability to meet their monthly mortgage costs.”
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