Just more than half of tenants of residential properties paid their rentals on time in the fourth quarter of last year while 21 percent paid late, 13% only made part payment and 12 percent did not pay any rent.

This is the findings of TPN Credit Bureau contained in its Rental Payment Monitor for the Fourth Quarter of 2008 released this week.

The findings, according to Michelle Dickens, CEO of TPN Credit Bureau, are in line with third quarter data, but reflect a substantial drop from the first two quarters of last year when the national average of tenants paying their rent on time was 70 percent.

TPN’s figures show that on a national average 54 percent of tenants paid their rent on time in the third and fourth quarter of last year.

Dickens says that TPN also noted from payment trends that rentals in the R3 000 to R7 000 are most likely to be paid timeously. In fact 61 percent of tenants in this bracket achieved paid up status.

In the R7 000 to R12 000 bracket, just 46 percent of tenants paid on time and in full while 30 percent paid late, placing immense strain on investors, who in many case might seek legal advice or take other costly collection action.

Dickens says similar trends were noted in the R12 000 plus category, where only 34 percent of tenants paid on time and a further 37 percent paid last. Of interest is that the average percentage of tenants who did not pay rent at all is similar across all price brackets.

Turning to regional levels, Dickens says the province where non-payment was most severe was in KZN at 18 percent while the default rate was 10 percent in the Eastern Cape and Gauteng and eight percent in the Western Cape.

Further cause for concern in the rental industry is the national average of 12 percent of all tenants who are unable to settle their monthly obligations. Naturally this trend creates added consequences for landlords who are increasingly under pressure to meet bond repayments. Currently 60 percent of leases obtain 0,5 percent to 0,75 percent rent value as a percentage of market value. This, Dickens says, means in most cases investors are left with a shortfall on their rent to mortgage and levy payments, which is clearly exacerbated if the tenant pays late, or does not pay at all.

The national average rent price, according to the Monitor, continued its decline by two percent from Q3 to Q4 and five percent in the last 12 months to R4 300 per month. This trend is compounded by an over-supply of property stock where tenants are able to negotiate between agents, and are also becoming increasingly aware of the value of rented units within complexes and/or in neighbourhoods where they reside.