According to research from the insurer, the number of private renters slipping into arrears because they simply can't afford the rent is rising. In fact, 13% of renters have gone into arrears in the past 12 months, with over half of these (7%) doing so in the past three months alone.
On top of this, over 50% are increasingly concerned about being able to afford their rent going forward.
All of this potentially adds further misery to the mortgage market as buy-to-let owners are left financially strapped through tenants failing to pay the rent.
AXA can also reveal that 95% of those in privately rented accommodation have no kind of income protection to help out if their financial situation was to alter through losing their job. Recent statistics show jobless levels are on the rise and redundancies are increasingly hitting the headlines.
Mike Keating, managing director of personal lines intermediary, at AXA said: "Our research shows that over a third of people privately renting are doing so because they can't get a mortgage at the moment. On the surface of it, this looks like the rental market should be buoyant. But if you consider that many of those renting may be struggling to make ends meet it's certainly not all good news for buy-to-let owners.
"The cost of living is rising rapidly and average earnings are not keeping pace. And while rental rates appear to have dropped marginally in the last few months it's going to continue to be tough for many tenants."
AXA are advising both landlords and tenants to take the necessary precautions to protect themselves. The company provides a buy to let insurance with an option to cover unpaid rent.
