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Landlord finances healthiest on record as arrears and evictions dip

The latest figures from estate agency chains Your Move and Reeds Rains show that in the final quarter of 2015 landlord finances improved, the number of tenants in serious arrears decreased and the number of evictions dropped slightly. 

The number of cases of landlords in buy-to-let mortgage arrears fell by 3.5% to 5,500 in Q4 2015. 

On an annual basis, progress for landlords’ finances has been extremely strong - the number of buy-to-let mortgages in arrears has dropped by 54% since standing at 11,900 cases in Q4 2014.


“Landlords and the buy-to-let industry have come in for serious criticism over the last year – but the overwhelming evidence points to a vital, growing and successful industry,” says Adrian Gill, director of Your Move and Reeds Rains. 

He also says that buy-to-let mortgages have become increasingly reliable for lenders, as landlords are ever less likely to fall into arrears themselves.

“It would be wrong to say that the UK private rented sector is perfect. But in the context of these facts, the demonization of landlords by some policy makers seems at best out of proportion,” says Gill.

The estate agents' research also shows that those renting their homes from private landlords are now less likely to suffer from a serious build-up of late rent.

By the final quarter of 2015, a net 1,500 households moved out of serious rent arrears, when compared to Q3. 

This represents a 1.5% quarter-on-quarter improvement, and reverses some of a deteriorating trend throughout the earlier parts of 2015. 

There are now 82,900 households behind on more than two months’ rent, down from 84,200 in Q3 2015.

Despite the quarterly improvement, the number of tenants in serious rent arrears at the end of last year was 19.5% higher than in Q4 2015.

The agents calculate, however, that tenants in arrears still represent just 1.6% of all tenancies. 

“Private renting is still absorbing thousands of extra households every month – housing millions more than just a few years ago. As this tenure of housing and this way of living grows, affordability is the issue that goes hand-in-hand with questions of capacity,” says Gill.

Meanwhile, in the final quarter of last year there were a total of 26,676 court orders issued for the eviction of tenants, on a seasonally adjusted basis.

This is down marginally by 0.4% compared to Q3, when seasonally adjusted eviction orders stood at 26,775. 

On an annual basis, downward progress for evictions is more considerable, with 5.3% fewer evictions than 28,167 a year before in Q4 2014. 

The latest figures for evictions represent 32% of the stock of tenants in severe arrears in Q4, meaning only around one-in-three such cases translate into evictions each quarter.

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    Progress for landlords’ finances has been extremely strong. It's not a surprise having in mind the rising rent levels.


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