Wednesday, 4 July 2012 2:09 PM
More than 100,000 private tenants are in severe financial difficulty as a result of rising rents and wages that are falling in real terms, according to a new survey.
Chartered surveyor Templeton LPA says the number of tenants more than two months behind with the rent rose by eight per cent or 7,000 in the second quarter of 2012.
The total number of tenants in severe arrears now stands at 100,400, an increase of 24 per cent on a year ago. This is the highest total since Templeton LPA started keeping records in 2008.
Households with more than two months’ rent arrears now make up 2.6 per cent of all private tenancies in England and Wales, an increase from 2.4 per cent in the first quarter.
The rising number of tenants in arrears is also leading to more evictions. In the last quarter, 26,060 tenants faced eviction notices, an increase of six per cent on the first quarter and five per cent on a year ago.
However, although the number of tenants in arrears is rising, the general level of arrears has improved. Some 8.9 per cent of all rent in the private rented sector was late or unpaid at the end of May, down from 9.9 per cent in April.
And the increase in tenant arrears has not yet led to a rise in landlord arrears. The number of buy-to-let landlords falling behind with their mortgage was down four per cent on the previous quarter and 19 per cent on a year ago but levels are still double what they were four years ago.
Paul Jardine, director and receiver at Templeton LPA, said: "As the private rented sector grows, the number of tenants in dire financial straits is steadily climbing. Falling wages in real terms have been compounded by rising rents, pushing a greater number of rented households over the edge financially.
"With the instability in the labour market and wider economy, and public sector cuts still to come, the section of renters in multiple months of arrears is likely to continue its expansion."