Muna Said, Registry Trust
Friday, 24th November 2023
The UK housing and accommodation sector continues to endure a changing landscape, the issues of landlord debt and mortgage arrears have gained prominence, casting a shadow on lives of both landlords and tenants. As economic challenges persist individuals are finding themselves grappling with the burden of financial obligations, leading to a surge in unpaid rent and mortgage fees.
According to a report that was published by Citizens Advice Bureau last year, one in six renters were already worried about paying their rent for the next three months. 425,000 renters were in arrears, on average owing £937 each. Rent arrears can significantly impact landlords, particularly those who rely on rental income to cover mortgage payments, property maintenance and other expenses.
The cost of private renting is steadily increasing, with private rental prices paid by tenants in the UK rising by 6.1% in the 12 months leading to October 2023.
This trend is relatively consistent across England (6.0%), Scotland (6.2%), and Wales (6.9%). As the issue of rental prices in the private sector increases, a further 43% of renters reported that it was difficult to afford their rent payments (February to May 2023)
According to statistics from UK finance, 87,930 homeowner mortgages are in arrears of 2.5% or more of the outstanding balance (Q3 2023), which is 7% greater than the previous quarter. The quarter one to quarter two period also saw an increase of 7% in arrears, so the pattern continues.
Furthermore, a total of 630 homeowner mortgaged properties were taken into possession in the third quarter of 2023. In the buy-to-let arena, a total of 11,540 properties are in arrears with an increase of 29% from quarter two to quarter three in 2023. A total of 450 buy-to-let mortgaged properties were taken into possession in the third quarter of 2023.
In conclusion, the dynamic landscape of housing and accommodation has brought to the forefront the pressing issues of landlord debt and mortgage arrears, impacting the lives of both landlords and tenants. As economic challenges persist, individuals grapple with the burden of financial obligations, leading to a notable surge in unpaid rent and mortgage fees.
These concerning trends highlight the urgent need for comprehensive measures and support systems to address the escalating issues of renter distress, landlord difficulties, and the broader implications for the housing market. It is imperative for stakeholders, policymakers, and communities to collaborate in finding sustainable solutions to navigate these challenges and foster a more resilient and equitable housing environment.