Many of the one-million-plus landlords in Britain's private rented sector could be facing a severe financial squeeze because they have to make mortgage repayments on home loans while their tenants fall behind on paying the rent.
New research from LSL Property Services, which owns Your Move and Reeds Rains estate agencies, claims more than 557,000 tenants were behind in rental payments at the end of May. First steps to evict the 133,000 tenants seriously behind on payments started in May.
"Landlords tend to be quite flexible with tenants who fall behind with their rent," said LSL commercial director David Brown.
"Two-thirds of those in arrears are less than a month late and most of them quickly get up to speed again."
LSL said tenants on lower rents were hardest hit in the recession, because more lower-paid jobs have been axed as the economy has deteriorated.
However, the LSL survey said the arrears picture has actually improved since November 2008, when rent arrears totalled £278 million (Dh1.67 billion), or the equivalent of 13 per cent of all rents due.
Brown says the improvement has been caused because many would-be buyers decided to rent a property while they wait for prices to fall – many of them have good credit records, and have no problems with paying rent.
Wales heads the arrears league, with 18.3 per cent of tenancies in trouble, followed by the North-East/ North-West (14.6 per cent), West Midlands (13.7 per cent), East Midlands (13.2 per cent), Yorkshire and The Humber (12.8 per cent). The average arrears level for England and Wales stands at 11.6 per cent.
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