AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Source: Srdjan Randjelovic, Shutterstock
Summary
- A report has found that 840,000 tenants have arrears in rent since the lockdown began.
- The report found that debts have increased so much that tenants would no longer be able to afford to pay the pending arrears.
The pandemic’s effects are here to stay for a long time. Its impact has left economies and businesses counting the damage as many countries are still struggling with lockdowns and restrictions. A latest report by National Residential Landlords Association has found that 840,000 tenants have arrears in rent since the lockdown began in March 2020. The pandemic has ravaged UK’s economy. Three national lockdowns have crippled business activities and plunged the economy into its worst recession in 300 years. The government’s furlough scheme has so far safeguarded jobs.
Also read: How Return Of 95% Mortgage in The Housing Sector Would Impact the Banks
But economic activities coming to a pause has also impacted the debt conditions. The report found that debts have increased so much that tenants would no longer be able to afford to pay the arrears back, and most would have to give up the accommodations as emergency measures would ease June onwards. It found that 18 per cent of those who had arrears had rent dues worth £1,000, and 11 per cent of those who have rented accommodation are presently unemployed.
The report also found that the situation was impacting landlords as well. About 60 per cent of them have lost their rental incomes as they have been keeping struggling tenants at their homes. Of them, 39 per cent have seen their losses increasing. Of those surveyed, 14 per cent of landlords said they had lost over 20 per cent of their rental income.
About 65 per cent of those surveyed said that the pandemic would negatively impact their lettings business, and 34 per cent said they would either be selling the properties that are on rent or completely exit the market.
The report also found that not all landlords were millionaires and 44 per cent of the respondents became landlords to increase their pension, and 94 per cent rent out the property as individuals, and 45 per cent had put just one property on rent.
Also read: RICS Survey Reveals Rise in Empty Shops and Office Spaces in the UK
The landlords’ association has recommended interest-free, sovereign-guaranteed hardship loans be made available to those tenants who have arrears and do not qualify for support and those who are already benefitting from some schemes or plans, the association recommended more grants.
The association has suggested that courts ensure the legitimacy of possession through video calls and have also sought for access to legal advice for tenants earlier on in the process than what they have presently.
The government had earlier said that rules barring repossessions would be extended till 31 May and would be wound up gradually thereafter.
National Residential Landlords Association CEO Ben Beadle said that the government authorities have to ensure that tenants have the financial wherewithal to pay off rent arrears that have accumulated due to the pandemic, and if the authorities failed to do so, our nation would be staring at the prospect of damaged credit scores and rising homelessness.
