LATEST: New report reveals big jump in landlords facing rent arrears

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More than a third of landlords have experienced rent arrears during the past 12 months – a clear indication that the cost of living crisis is starting to hit home.

Paragon Bank’s latest Landlord Report shows that 36% had tenants in rent arrears which, although only based on a survey of 621 landlords, is a big jump from the most recent Household Resilience Study which found just 7% of private renters were in arrears during April-May 2021.

Damaging reports

Landlords have had to contend with a range of other issues too, with almost a quarter (24%) coping with property damaged by tenants, and as a result, 23% had to withhold all or part of a deposit.

Paragon also found that 13% suffered anti-social behaviour from tenants, 13% had sought vacant possession, 11% used legal services, 8% made an insurance claim, 4% experienced sub-letting and an unlucky 1% had squatters. Despite this, none of those 621 questioned had missed a mortgage repayment.

Good job

Landlords largely do a good job and most of their renters are happy, the report found, which found that 91% have a positive relationship with their tenants and 88% had been very or extremely flexible with tenant requests.

Research for a Social Market Foundation report, commissioned by Paragon, found that 81% of private renters are happy with their current property, and 85% are satisfied with their landlord.

Paragon Mortgages MD Richard Rowntree (pictured) says: “It’s interesting to see that considering how properties meet the needs of tenants is central to landlords’ investment strategy and more important than generating high yields or capital appreciation.

“This is perhaps at odds with the negative perception of landlords who are sometimes viewed as placing profits above people.”

Paragon also found that landlord demand for city-centre property was strong last year, with house purchase completions in urban postcodes increasing by 100% compared to the year before. Milton Keynes was the city with the highest buy-to-let completion growth (667%), followed by Manchester (300%) and Bristol (300%).

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