More tenants face rent struggle

More tenants struggled with rent payments last month after a survey showed arrears levels have reached the highest level since January last year.

A total of £326 million of rent was either late or unpaid, according to LSL Property Services' Buy-to-Let Index, up from £241 million in November.

The cost of Christmas on already strained household budgets is likely to be one factor behind the rise, which equates to 10.1% of all rent across England and Wales.

With finances under pressure, the study also found that the average rent fell by 0.9% to £734 per month. However, rents are still 3.2% higher when compared with 12 months previously, just below inflation.

Rents across the country have fallen for two months in a row, but LSL warned that this seasonal "blip" is unlikely to last for long as pressure on the sector continues amid strong demand from people struggling to get on the property ladder.

Campbell Robb, chief executive of Shelter, said: "With the rising cost of living, wage freezes and rents remaining high, it's not surprising that rent arrears are at their highest for a year. This time of year is particularly difficult for many families as bills coming in from Christmas take their toll on finances already stretched to breaking point."

Rents in London saw one of the biggest month-on month drops, with a 1.5% slide, although at a typical £1,087 a month, they are still 6.3% higher than a year ago.

The East of England and the North East recorded the biggest month-on-month falls at 1.7%, while rents in the West Midlands, the South West and Wales bucked the trend, with increases of 1.3%, 0.9% and 0.4% respectively.

David Newnes, director of LSL Property Services, which owns estate agents Your Move and Reeds Rains, said: "Rents have returned to August levels, but it's a seasonal blip rather than an about-turn in the market.

"Tenants were in a stronger bargaining position as landlords reduced rents to fill empty properties in the slower winter months, yet as the new year progresses the underlying weakness in the mortgage market will mean competition will heat up once more."