Mr. Pat Montague:

They are developing massive debt arrears because of a lot of non-payment of service charges. The reasons can vary. In some cases, the debt profile is quite low, while in others it is extraordinarily high. The anecdotal evidence is that absentee landlords, in particular, are much less likely to pay service charges, whereasowner-occupiers are much more likely to pay them because they are cheek by jowl. They are living with the impact of the lack of services. Only about a quarter of our apartment stock is owned by owner-occupiers. The rest is owned by institutional landlords, bigger landlords, private landlords and small landlords. Many of this last group are accidental landlords who bought apartments before the crash and in a sense were not able to sell them. They were their first homes and they had always intended to move on but were stuck with them. There are also approved housing bodies and local authorities. Owner-occupiers are very much the minority. Somewhere around a quarter of the cohort are owner-occupiers. This is a difficulty in terms of the profile. AHBs and local authorities are very good at paying the service charges, but there are still a significant number that do not pay. The only way you can get them to pay is by taking them to court, and there are plenty of instances where landlords have been taken to court and the judge says they will cut them a break. They end up having to pay only a portion of what they have owed, whereas owner-occupiers and other people have paid their service charges, so they are losing on the double.