job losses and pay cuts are beginning to take hold

According to latest research from the Association of Residential Letting Agents (ARLA) in the fourth quarter 2010, 40% of ARLA members reported an increase in tenants struggling to meet rental payments in the preceding six months - a rise from 35.9% in Q3 2010.

This is the first time the number has increased in 18 months, suggesting that job losses and pay cuts are beginning to take hold, causing tenants to have difficulties.

The situation was least noticeable in central London, where just under a third (27.9%) of members reported an increase, compared with the rest of the UK (46.4%).

Ian Potter, Operations Manager at ARLA, said: "At the beginning of last year we predicted that the number of tenants having difficulties paying rent would increase and unfortunately, this seems to be the case today. It is a situation which can have serious repercussions throughout the PRS as, without guaranteed rent income, landlords may also have problems paying mortgages. At worst, it may result in a rise in repossessions.

"While it is difficult for landlords to predict whether current or prospective tenants will hit financial difficulties, our research highlights the importance for landlords or agents to implement a thorough selection process and to conduct reference checks on potential tenants - and to consider the benefits of rental protection insurance.

"The same is true for anyone looking to rent a property - do your research before signing up with a new landlord. And if letting or renting a property through an agent, make sure the agent is a member of an organisation such as ARLA, which ensures landlord and tenant money is protected by a client money protection scheme.* Many agents do not have this consumer protection. ARLA agents are also required to be members of an ombudsman scheme which can offer redress if things to go wrong."

ARLA's research also showed a rise in the number of tenants haggling with landlords over rents, from 44.5% to 47.1%, further indicating the financial pressures on tenants.

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If you spot the car out and about give me a wave and if you get stuck behind me please make a mental note of our web address and pass it on to anyone who you think might love our service as much as our existing landlords do.  There's £50 in it for you if we let their property so this little memory test could be worth it.

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LHA is the allowance paid to housing benefit tenants in private rented accommodation. If private sector landlords reduce their rents they will be able to choose to receive Local Housing Allowance direct rather than relying on tenants to pass the payment on. This is one of several measures laid before Parliament in new Housing Benefit Regulations.

Welfare reform minister Lord Freud said: "We are looking for private landlords to respond to the need for lower rents and in return we are prepared to permit direct payments from the state."

"This incentive will bring an overall downward pressure on rents in the private sector. As these rents come down, more properties will become available to claimants and landlords will have certainty that their income will be protected."

New recipients of LHA will also have their allowances cut from next April. After this, the maximum paid to any LHA tenants anywhere in the country will be £400 a week for a four bed property. Furthermore, LHA will be calculated at 30% of local average rents rather than the current 50%.

The National Landlords Association noted: "Bringing forward the 30th percentile cut to April 2011 for new claimants will test how easily accessible rented housing will be for this group in need. The Government still needs to show how it will ensure that these tenants will be able to access at least the cheapest third of private rented properties and not be crowded out by other renters."

Why a Fixed Fee doesn't mean we don't care

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