According to the latest Tenant Arrears Tracker by Templeton LPA, part of the LSL Property Services, an average of 94,400 tenants in England and Wales were in severe arrears in Q1, up by one fifth compared to the same period in 2011.
At the current rate of growth, the number of renters facing arrears greater than two months will climb above 100,000 in the next quarter, said Templeton LPA.
Despite the increase, tenancies in severe arrears represented 2.4% of all properties in the private rental sector in England and Wales in Q1 2012.
Templeton said while severe arrears cases, or tenants with arrears of more than two months, continue to climb, overall tenant arrears have improved. It found that 9.3% of rent was late or unpaid by the end of February, a decrease from 10.7% at the end of 2011.
Paul Jardine, director and receiver at Templeton LPA, said: “While the general tenant population has absorbed the rising cost of renting in the last two years a minority of tenants are facing severe financial difficulties – a minority that is growing.”
Jardine added that these tenants have been pushed into deeper arrears by a combination of rising living costs, high rents and a weak labour market.
“In turn, these severe rental arrears figures have been inflated by the ongoing impact of county court closures. The closures have prolonged arrears cases, with landlords less able to gain court dates to quickly remove non-paying tenants.
“This is creating a backlog of tenants in extreme arrears, increasing the amount of rental income lost for landlords or their appointed receivers of rent.”
In the last quarter, 24,702 tenants faced eviction notices, an increase of 9% on the 22,634 in Q4 2010.
