Letting agents have reported that there has been an increase in the number of tenants struggling to pay their rent.
The Association of Letting Agents have reported that 41% of its members reported an increase in the number of tenants who have found it difficult to pay their landlords. This figure has increased slightly from 39% at the end of 2011 and 37% last Autumn.
Tenants and homeowners are feeling the pressures of balancing their finances since the cost of living keeps increasing. General household bills increasing such as gas, electric and insurances are all contributing to the stretch in funds. However wage increases don’t seem to be happening any time soon resulting in many people being faced with a payment freeze which is taking its toll.
As a result tenants have been negotiating to knock down the monthly price of their rent to help make their finances stretch, this has increased from 45% to 51% over the last three months. In particular the North East and the South West became the highest areas which were trying to negotiate a lower rent.
The latest buy-to-let index from LSL property revealed that average monthly rent in England and Wales is £705, around three years ago this was £650. On average rental prices have increased by 2.7% compared to a year ago with London still being the most expensive region to rent properties.
Ian Potter, operations manager at ARLA, commented on the results: “With unemployment predicted to rise and average rents also increasing in some parts of the country, it seems more and more tenants are finding it impossible to make ends meet.
“It is likely that the same is happening for landlords, who may find their mortgage rate is rising. At worst, this double whammy may result in landlords defaulting on mortgages and tenants being forced to move out of a property.”
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By Amanda Bainbridge