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Online agency warns tenants' arrears will worsen next year

An online lettings agency says tenants’ arrears are likely to be the biggest issue facing the rental sector next year unless the government scraps its proposed tax changes for landlords. 

Despite the proportion of tenants in arrears having improved since the last recession, the agency - Upad - claims it is witnessing the problem grow again. 

The agency says research from Savills, LSL Property Services and the Ministry of Justice suggest that almost 10 per cent of tenants fell behind with rent in August while 34,000 landlords issued possession claims between July and September.

Rent increases triggered by tax increases will exacerbate the problem, the agency claims. 

“Increased landlord costs will only make matters worse, especially for tenants who in some of the most expensive areas, such as our capital, are paying up to two thirds of their salary on rent” claims agency chief executive James Davis.

“Over-stretched landlords will try to recoup these additional taxes by increasing rents, but if wages struggle to increase more than inflation, landlords will struggle to secure rises, putting the entire lettings financial model at risk” he claims.

  • Kristjan Byfield

    As long as Tenants are carefully vetted and Landlords are offered the option of good insurance (of which there are many) I dont beleive this report to be accurate. We have seen almost no discernable difference in rent arrears in our 12 years of operation, even in the toughest part of the recent recession, because the critera shouldnt change. As an agent its also our legal obligatiin to ensure they are aware of insurance options- and there are numerous comprehensive products out there that offer rent and legal cover for up to 6 months for costings of £50-150. A tiny price to pay for that security. In fact, we give this free to all managed tenancies.

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