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Research carried out by accommodation website SpareRoom.co.uk has revealed than an increasing number of tenants are under financial pressure, despite the fact that unemployment levels are falling and the economy is beginning to recover.
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London and Scotland Unaffordable for Tenants
UK rents have risen by around 10% since 2009, but tenant rental budgets have not kept up and have actually fallen by 0.5%. The situation is a lot more dire in London. Here rents have risen dramatically over the last five years – by more than 26% – but the amount tenants can afford to spend on rent has only increased by 10%. In Scotland, rents have also increased by a significant amount – 24%. However, in this instance, tenants have seen their rent budget fall by 22%. The figures indicate that London and Scotland are the least affordable for tenants whereas Wales is the place to go if you need to rent your home.
Landlord Possession Orders on the Rise
As a result of this perilous situation, tenant arrears are now around 7%, although the number of tenants in serious arrears has fallen. Figures released by LSL Property Services show that the number of landlords seeking a possession order to remove tenants in arrears is at 5.0%, a figure that is 10% higher than this time last year.
“Some households succumbed to the wave of unemployment that followed the 2008 crisis, and as the broader monthly squeeze tightened its grip,” says Paul Jardine from Templeton LPA receivers.
“For a time – though still for only a small minority of tenants – there was a significant rise in rental arrears. But now as the jobs market gradually comes back to life, the effect on the most hard-pressed of households is clear to be seen.”
