One tenant in two leaves the property without having paid the rent and the percentage of those who pay late, in Italy, is 62%. This is the photograph taken from an investigation by SoloAffitti, a group that has been operating for over 25 years in the real estate income protection market, combining the 30,000 rental contracts concluded each year with protection services that intervene in the event of non-payment of the rent by the of the tenant.
By recording each of the default reports received over the years, the Group has built the largest database of defaulting tenants in Italy, from the analysis of which the profile of the insolvent tenant emerges today.
Who are the defaulters
A dossier which shows that the majority of tenants who stop paying rent are male (68.8%) and are concentrated in the 40-49 age groups (31.7%), 50 -59 years (25.4%) and 30-39 years (22.8%); arrears tend to drop for “older” tenants (12.1% for the 60-69 age group and 6.3% for those over seventy), and is very limited in the 18-29 age group (1 ,8%). Arrears are therefore mainly linked to the active and working age group, generally associated with the achievement of economic stability and an increase in income.
Another unexpected data concerns the percentage distribution of arrears by rent band foreseen by the rental contract: the vast majority of arrears reports (63.9%) are concentrated in the lowest rent band, up to 500 euros, while 29.9% concern rents between 501 and 750 euros and only 6.3% those above 750 euros per month. The lower the fee to pay, therefore, the greater the probability of non-payment appears to be. Furthermore, the average number of tenants who have lived in the property in 10 years is 4.7.
How many monthly payments are lost in a year
The number of monthly payments lost in 10 years due to tenants’ arrears is 9.8 and 1,800 euros is the average amount of legal costs incurred in 10 years for reminders and eviction actions. “The current market situation – underlines Silvia Spronelli, CEO of SoloAffitti – sees a strong imbalance between a rapidly growing demand for rental homes (+229% in the last year alone according to the SoloAffitti Research Office) and an offer inadequate to satisfy the request.
In reality, there would be houses: in fact, there are over 6 million residential properties owned by natural persons potentially intended for rent, i.e. not inhabited by the owner and not granted for free use to relatives. One of the reasons why these properties are kept vacant lies precisely in the fear of running into defaulting tenants, a fear that has worsened in recent years as a consequence of the block on evictions implemented in the Covid period”. According to the SoloAffitti Research Office, the fear Arrears are now the cause of the failure to rent properties in 30% of cases, together with the fear of not being able to regain possession of the property in case of need and the desire to keep it free for future needs.