Member Article

Rent debt falls by a third as fewer families struggle to make ends meet

The number of people falling behind with their rent has fallen by 35% in a year - suggesting fewer North East families are struggling to make ends meet.

The number of renters more than two months behind with the rent fell from 105,000 to 68,000 in the first quarter of 2014 –as official figures show wage rises on course to exceed inflation for the first time in six years.

Ajay Jagota of North East property firm KIS Lettings believes the figures show “economic recovery is starting to trickle into the North East”.

Figures from the Office of National Statistics shows wages rising by more than inflation for the first time since early 2010, with analysis of the data suggesting household disposable incomes will rise this year for the first time since 2009.

Expected average earnings are expected to rise by 2.2% this year, surpassing projected rent rises of 1.7%.

Although rising slower than anywhere else in the UK, North East house prices this week recorded a year-on-year rise of 2.9%

Ajay Jagota of North East sales and lettings business KIS welcomed the figures.

The firm manages properties for over 700 landlords from branches in Sunderland, South Shields, North Shields and Welwyn Garden City and was named Letting Agent of the Year at the 2013 Landlord and Letting Awards.

Ajay said: “These figures appear to mean good news for local families – and suggest the economic recovery is starting to trickle into the North East.

“There are other figures out there which aren’t quite to promising. Those wage increases don’t look quite so impressive if you strip away bankers bonuses - which aren’t exactly widespread round here anyway– and local house price rises, while encouraging in their own right, are the slowest in the country.

“Nonetheless there are plenty of reasons to be economically optimistic, and particularly positive about property.

“Continued good news depends on what happens to interest rates in the coming months. If they stay in a good place it will remain a good time to buy property as an investment and as a home. We could even be seeing Britain becoming a nation of homeowners once again.

“Whatever the future holds, these figures still highlight how statistically few renters fall into serious arrears – currently 1.4%. Rent arrears are every property investor’s greatest fear but these figures show than as a landlord the chances your tenants will fall behind with their rent are almost literally one a hundred.”

This was posted in Bdaily's Members' News section by Ajay Jagota .