ARLA: Rental arrears resulting from recession

11 February 2010

Written by Steve Olejnik

Buy to let landlords may see tenants struggling to pay their rent in the aftermath of the recession.

This is the view of the Association of Residential Letting Agents (ARLA), which revealed the results of a landlord survey today (February 11th).

Some 55 per cent of members noted an increasing number of tenants who struggled with rental payments. This is a decrease on the amount seen in the last quarter but remains worrying, ARLA explained.

Operations manager of the organisation Ian Potter said: "If the jobless total rises in 2010 it is inevitable that the number of tenants forced to default on their rent will also increase."

Unemployment is thought to be the main factor in tenants' struggles to pay their rent.

If rental arrears continue to add up, landlords may have to default on paying their mortgage, which could result in repossessions of buy to let property, Mr Potter cautioned.

Agents must carefully select tenants and landlords and draw up relevant contracts to ensure these problems are avoided.

Earlier this month ARLA explained that the government's decision to look at stamp duty changes was welcomes, but asked for action rather than words on other issues affecting landlords.

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