Despite the growth trend in the number of tenants in severe arrears (those in arrears of more than two months) being reduced, the number has hit a peak of 99,000 according to Templeton LPA.

The figure grew by 1.6% in Q3 2012 down from the 4.6% increase in Q2.

Paul Jardine, director and receiver at Templeton LPA, said: “Rising rents have kept the pressure on tenants’ finances, but it is tenants with the lowest incomes that are feeling the pinch the hardest. While the majority of tenants have shown a slight improvement in their ability to cope with the bigger rent cheques, the minority of renters who are months behind with rental payments is still expanding.

“Nevertheless, it’s encouraging news for landlords that the rate of arrears growth is slowing down. The labour market has held up well recently, and if it strengthens further, it may well keep a lid on the number of tenants unable to pay the rent in the short-term.”