Eviction ban extension could face tenants with over a year of rent arrears payments

Tenants across the UK could be facing months of rent arrear payments as a result of the current pandemic, with the average tenant expected to take as long as seven months to repay just three months rent, climbing to 14 for the worst hit, according to research conducted by deposit replacement scheme Ome.

Currently, tenants unable to pay their rent are safe from eviction, with the Government just announcing a two-month extension to the non-eviction period. To balance the books, the Government has also implemented a buy-to-let mortgage holiday for landlords struggling as a result, recently extending this to six months for those in need.

However, tenants still need to fulfil their rental obligations and those unable to pay at present could be facing lengthy backlogs of rental arrears payments.

For the average UK tenant unable to pay their rental outgoings, three months of non-payments would accumulate £2,877 in rental arrears, climbing to £5,754 over six months. With an average net monthly income of £2,039, it would take two months (1.4 months) to pay back three months rent and three (2.8 months) to pay back six months of rental arrears.

However, many tenants will still have financial obligations going forward and so a repayment based on total income is unrealistic. Ome looked at the time frame to repay these rental arrears based on a repayment of 20% of net income per month and found that it would take the average tenant just over seven months to repay three months of rental arrears, climbing to just over 14 months for those owing six months money.

In London, even with a higher net income, the high cost of renting would see the capital’s tenants take 10 months to repay three months of outstanding rent, climbing to 19 months for a six-month rental repayment.

The shortest time frame would be in the North East, although it would still take five months to repay three months of arrears and nine months for a six month repayment.

On a city level, tenants in Oxford would be the worst hit of all, with high rents and a lower salary requiring 12 months of rental repayments to cover three months of outstanding rent and nearly two years (23.3 months) to repay six months of arrears.

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Love or Hate Rightmove
Breaking News

Rightmove House Price Index: Prices fall though likely more due to holidays than rate rises

Price of property coming to the market sees first fall this year, down 1.3% in the month to £365,173 (-£4,795): Prices usually drop in August, and this 1.3% drop is on a par with the average August drop over the past ten years Summer holidays are taking priority and some new sellers are pricing more…
Read More
Estate Agent Talk

What can affect the profitability of a rental property?

In the residential lettings market, rents are rising, and competition is fierce. But what can affect the profitability of your BTL investment? We aim to find out here. As Stephen Clark, from Finbri bridging finance, says, “Demand for rental properties remains strong across the UK, but the market demand is not being met by the…
Read More
Breaking News

WEEKLY NEWS ROUNDUP – 12/08/2022

A roundup of the week’s top property and proptech news stories in partnership with Proptech-X   Table of Contents Airbnb for house shares’ raises a further £500k LettsPay partners with The Guild to provide Members with automated accounting tool Fine & Country has sights set on accelerating global growth with new appointments LettingaProperty.com Highlight New Smoke…
Read More
Commercial Agent Talk

How to Choose the Best Art for Your Hotel

Artwork is everywhere in great hotels, and while it may not be something guests consciously notice when they walk in, great art dramatically impacts the overall feel throughout the hotel space. Artwork can provide any hotel space – whether it’s placed in the lobby, a guest room or suite, or in the hotel dining room…
Read More
Estate Agent Talk

Marilyn Monroe bought her own home just four months before she died.

August 4th marked the 60-year anniversary of the death of Marilyn Monroe, who would be 96 if she were still alive. Still a sex symbol today, the blonde bombshell started as a pin-up model before branching out into cinema. Famous for her comedies, such as Some Like it Hot and Gentlemen Prefer Blondes, she was…
Read More
Breaking News

BREAKING PROPERTY NEWS – 11/08/2022

Daily bite-sized proptech and property news in partnership with Proptech-X.   LettingaProperty.com Highlight New Smoke and Carbon Monoxide Alarm Regulation Changes for Landlords Online lettings platform LettingaProperty.com is seeking to raise awareness among landlords and tenants of changes to the Smoke and Carbon Monoxide Alarm (England) Regulations. The regulations have been in place since 2015, but are…
Read More