Rent arrears at lowest level since tracking began

In Q2 2021 each landlord surveyed had an average of 1.3 tenants with outstanding rent payments, this is the lowest number since Q1 2011 when research agency BVA BDRC started tracking the metric.

The research, which was carried out on behalf of Paragon Bank, shows that following a decline from 1.6 tenants per landlord since Q1 2021, the numbers of tenants in arrears falling consistently after climbed to 2.1 in Q2 2020.

In addition, the average amount of outstanding rent has reached a four-year low. After falling from £2,376 in Q1 2021 to £1,781 Q2, a reduction of £595, the average amount of rental payments owed to landlords is the lowest since the end of 2017 when it sat at £1,584.

The survey of over 750 landlords found that just over a third (36%) 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%).

Highlighting the flexible approach taken by landlords in managing their tenancies during the pandemic, agreements were reached in almost all cases as 36% of landlords also said they had granted requests to some form of change to rent.

Encouragingly, 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, director of mortgage sales at Paragon Bank, said: “It is really encouraging to see the average number of tenants in rent arrears at the lowest point for ten 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.”