There are growing signs that rental debt owed by tenants as a result of the pandemic is starting to rise once again following the emergence of the Omicron variant, which is having a negative impact on the UK economy.

ARLA Propertymark has issued its November Private Rented Sector (PRS) Report warning that the proportion of tenants who are building arrears could be starting to grow.

Propertymark’s CEO Nathan Emerson commented: “Looking towards the sector’s immediate challenge as the pandemic rears its head once again, the unfortunate reality is that we may see an increase in the number of renters falling into arrears. It is therefore vital that vulnerable tenants are adequately supported during this time.”

According to the report, the number of tenants successfully negotiating rent reductions increased from 0.8% in October to 0.9% in November, which is the lowest number recorded in the month since records began.

It has also been revealed that the number of tenants experiencing rent increases dropped for a third month in November, as 58% of agents saw landlords increasing rents compared to 68% in October. This is the lowest rate increase since February, where rent increases stood at 49%.

Overall, demand from tenants remains strong, with the average number of new prospective tenants registered per letting agency branch rising in November to 82, up from October’s figure of 71.

Regionally, the East Midlands had the highest number of new tenants registered per branch with an average of 134. This number was lowest in Wales where there was only an average of 26 new prospective tenants registered in November.

In terms of the supply of rental stock, the number of properties managed per letting agent branch increased from 196 in October to 212 in November.

Year-on-year this is slightly lower than during October last year when the figure stood at 214.

Regionally, Scotland had the highest number of properties managed per letting agent branch with a figure of 304. However, rental stock was the lowest in Wales with an average of 106 properties managed per branch.

Emerson said: “Our latest PRS survey has shown a rebound in tenant demand following two consecutive months of decline. Many landlords are aware of how difficult this year has been for tenants and as a result we are seeing rent increases fall for the third month in a row.

“The Private Rental Sector – which makes up a significant amount of the UK housing stock – is facing the reality that many landlords are increasingly considering an exit from the market. A key focus for the government in the New Year needs to be how to incentivise more landlords to remain in the sector and attract new interest in the market.”