There has been a notable drop in the volume of tenants facing rent arrears, according to Propertymark.

The professional body for estate and lettings agents surveyed its members and found that on average, 2.5% of the properties they manage were in arrears in March 2024. This is compared to a seasonal high of 4.2% in December last year which has continued to reduce month-on-month into 2024.

Nathan Emerson, CEO of Propertymark, said: “It is undeniable that many households are not yet out of the woods in terms of stabilising their finances on the back of rocketing interest rates and increases to their cost of living. However, it is promising to see that our agents are reporting fewer tenants experiencing rent arrears.

“We know that good landlords and letting agents are working hard to keep rents as low as possible in order for landlords to break even and afford their current mortgage rates as many are also feeling the impact of rising costs.

“What we now hope is that given that inflation continues to fall at the moment, we can be optimistic that interest rates and inflation will drop sooner rather than later so that everyone can start to feel the financial restraints loosen.”

Propertymark’s Housing Insight Report also reveals that the average number of new prospective tenants registered per member branch provides an indication of market demand. Registrations decreased from 89 in February 2024 to 82 in March 2024 suggesting that demand is slowing. It is possible that ongoing legislative uncertainty and relatively high rents are contributing factors.

It is possible to contrast supply and demand indicators to provide an overall sense of what is happening in the market. The average number of new applicants registered per member branch decreased in March 2024 and stock levels increased marginally.

However, despite being slightly weakened, demand continues to outstrip supply, with around nine new applicants registered for each available property in March 2024.