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Rental payment problems jump 4%

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  • 12/01/2011
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Rental payment problems jump 4%
Tenants are increasingly struggling to meet rental payments, according to the Association of Residential Letting Agents (ARLA), with 40% of its members seeing an increase in problems in Q4 2010.

This was up from 35.9% in Q3 and is the first rise ARLA has recorded in 18 months.

ARLA suggested that job losses and pay cuts are the main causes of tenants failing to meet rent payments.

In London, under a third of ARLA members reported an increase (27.9%), compared with the rest of the UK (46.4%).

Ian Potter, operations manager at ARLA, said “It is a situation which can have serious repercussions throughout the private rental sector as, without guaranteed rent income, landlords may also have problems paying mortgages. At worst, it may result in a rise in repossessions.”

He added that landlords should make thorough checks on a tenant to ensure that they can pay their rent.

“Our research highlights the importance for landlords or agents to implement a thorough selection process and to conduct reference checks on potential tenants – and to consider the benefits of rental protection insurance,” said Potter.

ARLA’s research also showed a rise in the number of tenants haggling with landlords over rents, from 44.5% to 47.1%, further indicating the financial pressure on tenants.

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