Rent arrears fall despite economic impact of pandemic
The average number of tenants in rent arrears is at its lowest level for 10 years, according to Paragon Bank.
It found that landlords had an average of 1.3 tenants with outstanding rent payments in the second quarter of this year. This is the lowest number since the first quarter of 2011, when research agency BVA BDRC started tracking the metric on Paragon Bank’s behalf.
The number of tenants in arrears has fallen consistently after climbing to 2.1 in the second quarter of 2020, as the Covid-19 pandemic impacted incomes.
In addition, the average amount of outstanding rent has reached a four-year low, tumbling from £2,376 in the first quarter of this year to £1,781 in the second.
Just over a third (36%) of landlords have had a tenant request a change to their rent, most commonly rental holidays (18%) or a reduction in rent of up to 20% (14%).
Agreements were reached in almost all cases as 36% of landlords also said they had granted requests to some form of change to rent. Such requests have been declining since the start of the pandemic, with the proportion of those asking to change rental agreements falling by seven percentage points year-on-year.
Moray Hulme, Paragon Bank director of mortgage sales, said: “It is really encouraging to see the average number of tenants in rent arrears at the lowest point for 10 years and the amount of outstanding rent at the lowest since 2017.
“Our latest survey has also showed us how landlords have been supporting tenants throughout the pandemic, granting requests to changes to rent in the vast majority of cases.
“These requests have been falling alongside the incidences and volume of rent arrears and considering that the fewest number of people are now on furlough since the scheme launched in March 2020, it is a good indicator that the economy is bouncing back well.”