Tenant arrears increased for the first time since April, with 10.7% of all UK rent being unpaid or late by the end of August – up from the 9% of rent unpaid or late in July, according to the latest data from LSL Property Services plc

The company which owns the lettings agents Your Move and Reeds Rains report that unpaid rent by tenants was £300m in total across the UK in August, up 19.5% from the £251m unpaid in the previous month. However, they an August rise in arrears is a seasonal phenomenon. Last year, arrears rose from 9.2% in July to 11.3% in August 2010.

David Brown, commercial director of LSL Property Services said: “The holiday season often takes its toll on tenant arrears, with many households squeezed by summer holiday spending. While we expect arrears to fall back into line in the short-term, the growth is indicative of the mounting pressure facing tenants. With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long-term we anticipate that rental arrears will become a growing financial problem for landlords.”

Commenting on the above, Paul Jardine, receiver and director of Templeton LPA, who are surveyors specialising in LPA receiverships said: “Many returning holidaymakers find themselves hard-pressed after holiday spending in August, and encounter greater difficulty in meeting their monthly rent cheque. We expect arrears to fall back in the short-term after tenants have had time to put their finances back in order, but the recent unemployment figures should give pause for thought.

“At the same time as rents are rocketing up, unemployment is rising by its fastest rate in two years, and a growing number of tenants are likely to see their employment threatened. Tenant arrears have performed better than expected in the past year, but landlords must remain vigilant to prevent being caught unawares by mounting rental arrears as the planned public sector job losses kick in."