Tenants struggling to pay rents: Arla

by Daniel Jones

A rise in rental arrears cases could be seen across the UK as the financial squeeze on households is felt. Tenants are struggling to pay their rents on time, according to the Association of Residential Letting Agents (Arla), which could mean more landlords need to use a section 8 notice in order to terminate a contract.

Four in ten (41.2 per cent) of the organisation's members reported an increase in the number of tenants struggling to meet their rental payments to landlords in the six months to March.

As a result, Arla says an increasing number of tenants are attempting to reduce the price of their rent when negotiating with landlords. It claims that rent haggling has become most prevalent in the north-east and south-west of England. Tenants in London are the least likely to try to knock down their rent.

Ian Potter, operations manager at Arla, believes a combination of rising unemployment and higher average rents makes tenant arrears a growing problem for much of the country.

Buy-to-let lender BM Solutions recently revealed that monthly rents rose 4.8 per cent over the year, up to £716 in 2011 from £682 in 2010.

Arla president Tim Hyatt adds: "This situation highlights just how important it is for both landlords and tenants to carry out thorough research and, where possible, checks before signing a tenancy agreement."

David Lawrenson, private rented sector expert at LettingFocus.com, believes it is important to keep talking to tenants if they start to miss payments. He argues that landlords should remain flexible, and either look at giving notice to terminate the contract to find new occupants, or agree a way of the incumbents to pay once they are able to do so.

"The worst thing is if you don't receive the rent and then the tenant becomes non-contactable and then a solution cannot be found," Mr Lawrenson says.

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Published on: April 20, 2012

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