Mortgages  

Tenant arrears fall as rents increase: LSL

The firm’s monthly buy-to-let index revealed a rapid improvement in tenant finances during October with the proportion of late rents falling from 8.5 per cent in September to 7.01 per cent. There was also a significant reduction on LSL’s first analysis of the rental market in November 2008 with 13.1 per cent of tenants in arrears.

Data from the index mirrored wider market statistics released last week by the Council for Mortgage Lenders which revealed that the number of mortgages in arrears had fallen to 1.33 per cent of the entire stock of mortgages during the third quarter of 2013, down from 1.38 per cent the previous quarter.

The index analyses approximately 20,000 properties in England and Wales. It revealed that rents had risen by 0.2 per cent since September, up 1.9 per cent on this time last year, while demand for tenancies remained strong, up 7.4 per cent compared to October 2012.

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Average rents also grew, rising by 0.2 per cent on September’s figure to £758 a month, a 1.9 per cent increase on October 2012.

David Brown, commercial director of LSL Property Services, said: “As prices rise, not only does the importance of a relatively affordable rental market increase, but also the incentives for property investors to expand their portfolios are growing.”

Adviser View

Nick Blatcher, director of Buckinghamshire-based advisory firm Citrus Mortgages, said: “We haven’t seen that many new buy-to-let investors in the past few months but we are seeing a lot of experienced landlords looking to expand their portfolios. Overall they are positive about the market.”

BUBBLES:

£245m – total arrears

7.01% – total proportion of buy-to-let in arrears

0.2% – average rent rise