A significant number of tenants are still struggling with rental payments, according to the Association of Residential Letting Agents (ARLA).
Results from the latest ARLA survey show that 55 per cent of members have seen an increase in tenants struggling to meet their rental payments, this is a decrease on the previous quarter but the figure remains worryingly high.
The data from the fourth quarter of the ARLA Members’ Survey of the Private Rented Sector was drawn from 733 offices, and is supported by mortgage lenders Mortgage Express and Paragon Mortgages. The survey was drawn from 341 landlords during November and December 2009. Together, these reports form the ARLA Review and Index. All surveys and statistics can be downloaded from www.arla.co.uk.
Ian Potter, Operations Manager of ARLA, said: “Unemployment has been the primary factor behind rental arrears throughout the recession. If the jobless total rises in 2010 it is inevitable that the number of tenants forced to default on their rent will also increase.”
“The housing market looks increasingly buoyant with demand for rental properties having risen strongly since October. The problem of rental arrears will therefore persist and potentially grow in seriousness as tenants get caught in a web of debt.”
As rental arrears begin to stack up residents run the risk of being evicted from their property. Simultaneously, landlords could be forced to default on their mortgage repayments which would ultimately lead to the property itself being repossessed.
“As the housing market continues to pick up and demand begins to exceed supply, there is likely to be an increase of new landlords and properties in the rental sector.” Mr Potter explained.
“It is crucial that agents engage in a careful selection process for both tenants and landlords, and ensure the relevant contracts and agreements are in place.”
