New research from Your Move and Reeds Rains has found that the amount of UK rental arrears has risen since Q2 2015.
Whilst figures do remain “mild” when compared to the peak figures of 3 years earlier, where rental arrears reached a level of 116,600, these new figures do need to be analysed and understood. The figures show that those who have suffered serious rental arrears – two or more months behind rental payments – rose to 84,200 in the third quarter of the year.
Experts believe that these figures are nothing to be worried about. They believe that the chance of rental arrears for tenants remains very low, but figures have increased due to the unprecedented growth of the rental market. Adrian Gill, director of Reeds Rains, said that “for the majority of tenants, paying the rent is becoming easier rather than harder.” However, some recent research has found rent is taking an increasingly large proportion of tenants’ income.
Importantly, Mr. Gill stated that landlords and letting agents both hold a degree of responsibility in regard to rental arrears. He recommends simple actions such as opening dialogues with tenants and informing them that they can bring problems to their letting agents in order to reduce the number of nationwide rental arrears.
How can Arthur help solve rental arrears?
Arthur is devised to solve these very problems that Mr. Gill mentions. The very function of Arthur is to improve the dialogue and communication between the different user-groups involved in the letting process. By improving communication, landlords can find collection dates and frequencies that suit tenants’ financial income structure. Some experts also recommend introducing direct debit payments, which is often the most cost-effective and flexible method of payment.
Meanwhile, landlord mortgage arrears have remained in stable health, with 5,700 arrears in the last quarter. This figure represents a 54.4% drop since Q3 2014. However, with the increase in tenants arrears, the likelihood is that landlord arrears will soon follow. As such, landlords should consider using Arthur Property Management Software. By better communicating with their tenants, they can reduce the chance of tenant arrears, and therefore reduce the possibility of being unable to meet their mortgage payments.
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