Sharp rise in rental arrears as 300,000 tenants fail ...

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03 June 2020

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Sharp rise in rental arrears as 300,000 tenants fail to pay on time

More than 300,000 tenants failed to pay their rent on time last month, new research from Goodlord suggests.

The study by the rental market technology firm, on behalf of Telegraph Money, found that almost one in every 15 renters fell behind with payments in May.

Some 6.6% of 16,000 properties surveyed were in arrears of at least one week, up from 5.8% in April and the typical rate of 4%.

With 4.6 million private rented households in the country, the 6.6% arrears rate suggests that more than 300,000 tenants are now behind with payments.

The coronavirus pandemic has contributed significantly to the surge in rent arrears as many tenants face financial hardship.

Research by housing charity Shelter suggests that one in five renters in England are likely to lose their job within the next three months.

Despite the spike in rent arrears, this should not necessarily lead to a hike in immediate evictions, according to Franz Doerr, CEO of flatfair.

The government has paused eviction proceedings until 25 June and has also temporarily extended notice periods for some tenancy types to three months. But it is not yet clear what, if any, alternative measures will be put in place post 25 June, and as a consequence, Citizens Advice is telling people who are struggling to pay their rent to get in touch with their landlord and try to negotiate a reduction.

Doerr said: "As more firms start to furlough staff and others cease trading due to the economic impact of the virus, swathes of young renters up and down the country will see their incomes plummet and may not be able to pay their rent. The mounting rent arrears crisis will get worse before it gets better.

“This may, in turn, see many landlords struggling to meet their own obligations such as mortgage repayments.

"Landlords and tenants alike need to be given the space to negotiate repayment plans that ensure that everyone is treated fairly.”

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