Tenant arrears drop despite some 'unprecedented' rises in rents

Tenant arrears are at their lowest since 2008, despite rents inching up to a new record across England and Wales, according to the latest Buy-to-Let Index from LSL.

October’s measure of tenant arrears – at 7.1% of all rent – represents the healthiest month for tenant finances since LSL began recording this data in November 2008.  During that month five years ago, 13.1% of all rent in the UK was in arrears.

Average rents across England and Wales rose to £758 per month in October after a monthly increase of just 0.2% (about £1) since September. However, rents rose in only three regions and fell in seven, according to LSL.
 
Annually, this leaves rents 1.9% higher than October 2012 – and at a new all-time high.

There are different figures from Sequence, part of Connells, but the trend is similar. Sequence puts national average rents at £785 in October, up 1% on October and up 11% annually. Supply of new rental property dropped 4% over the month.

Sequence head of lettings Stephen Nation said: “We have seen an unprecedented rise in rents over the last month, with tenants now giving up 41% of their monthly pay packet in rent.”
 
According to LSL, lettings activity slowed slightly in October, with 1.6% fewer lettings than in September. However, the figure was up 7.4% on October last year.

The biggest falls in rent were in the West Midlands, with rents down 3.6% since September. This was followed by a fall of 2.4% in the East Midlands and a monthly drop in Yorkshire and the Humber of 1.7%.
 
However, rents rose 2.4% in the south-east, in the south-west by 1.5% and in London by 1.3%.

On an annual basis, London had by far the sharpest rent rises – 4.9% higher than in October 2012.
 
By contrast, rents in the East Midlands have fallen over the last year by 3.9% (or £30). This was followed by a 1.5% annual drop in the north-east, while rents in the West Midlands are now 1.2% lower than in October 2012.