Increased Rent Rates Push Tenants into Arrears

A third of UK landlords increased rent rates in Q3 2011, leaving thousands of tenants in arrears, says Paragon Mortgages.

The latest figures revealed by Paragon, specialised buy to let lender, suggest that rent rates in UK have increased for the third consecutive quarter. However, while in Q1 and Q2 2011, only 29% of landlords increased rent rates, this time the prices have been risen by almost 35% of rental property owners.

As a result, the number of tenants in arrears has hit 84%. Experts of Money Advice Trust are determined that many tenants simply cannot meet their monthly bills because the increase in rent rates coincided with "a rise in inflation, particularly of food and fuel costs."

Meanwhile, 4% of British landlords said they decreased rent rates in Q3 2011. It is interesting to note that the rises in rent rates were most common among professional, not amateur landlords.

Commenting on the findings, Mr. Terrington of Paragon Mortgages said: “With tenant demand only looking to increase further in the coming months, landlords are likely to continue to experience increases in their rental income, especially given that 49% of landlords said they expect demand to further increase in the next 12 months.”