Landlords face arrears crisis as half of tenants struggle to pay rent - THE TELEGRAPH
BY Melissa Lawford
Landlords face an arrears crisis worse than during the pandemic with one in 13 private tenants now behind on rent, new research has found.
The share of households falling behind or struggling to meet their housing costs has rocketed by nearly 70pc, as the cost of living crisis hammers mortgaged homeowners and tenants, according to new analysis by the Resolution Foundation, a think tank.
Between January 2021 and November 2022, the share of households falling behind on or struggling to meet their housing costs jumped from 26pc to 44pc.
Among private renters, 8pc said they had fallen behind on housing payments in the three months to November. A further 53pc said that they had met their housing costs, but had struggled to do so.
The report warned that those who were struggling in November are more likely to fall behind on housing payments as the cost of living crisis continues over the coming months. One in eight private renters said they were “very worried” about covering their payments in the next three months.
Cara Pacitti, a senior economist at the Resolution Foundation, said: “Private and social renters are at the sharpest end of the cost-of-living crisis. The fastest rent rises in a decade, alongside wider cost of living pressures, have left three in five renters falling behind on or struggling with their housing costs.”
She added: “As housing costs are set to continue rising, the situation for renters will worsen without further policy intervention.”
One of the reasons why the cost of living crisis has had a more dramatic impact on people’s ability to meet their housing costs is because government support is much more limited compared to during the pandemic.
Local housing allowance rates, for example, have been frozen since the start of the Covid outbreak, despite enormous jumps in rent.
Landlords are also being much less lenient. In January 2021, 6pc of renters said they had been given a rent reduction. In November the share was just 3pc – but a further one in seven had asked for a cut and been turned down (more than double the 6pc rejection rate in January 2021).
Many buy-to-let investors with mortgages will have far less financial leeway. Rising interest rates have also brought much greater strain for mortgaged homeowners.
Between January 2021 and November 2022, the share of borrowers behind on or struggling to meet their housing costs nearly doubled from 27pc to 50pc.
The research was based on a YouGov survey of 10,470 adults.