A significant number of private rented sector (PRS) tenants are struggling to pay their rent, a financial charity organisation has warned.
According to the Money Charity, growing levels of personal debt is making it hard for individuals to keep up with their payments each month.
The organisation said an increasing number of landlords in England and Wales are issuing court claims against their tenants as a result. It added possession orders have also risen, with close to seven in ten claims – either outright or suspended – ending in an order of some variety.
Michelle Highman, Money Charity chief executive, said the high level of rent in many parts of the country is partially to blame for this problem.
“That increasing numbers are unable to even sustain their rental payments is particularly worrying,” she added.
Research by the Money Charity has revealed personal debt levels in the UK have surpassed the previous peak that was reached in September 2008. The total value of personal debt in the UK now stands at close to £1.4 trillion, it said.
While the Money Charity’s warning is something the letting sector should take note of, it is in contrast to research from LSL Property Services, which found rental arrears fell in October despite average rents continuing to rise.
The organisation revealed the typical rent increased 1.9 per cent year on year to £758 during the month, but the number of tenant arrears dropped to the lowest level recorded since 2008, suggesting renters’ finances may be improving. Total arrears in October amounted to £245 million – 7.1 per cent of all rent.
Commenting on these figures, LSL director David Newnes said: “The fact tenants have paid down late rent to such an extent is testament to the professionalism of landlords, the availability of advice for tenants and the stability of the entire industry.”
He added that renting remains “relatively affordable” despite limited wage growth and low savings levels.