Rental Income Impact Of COVID-19

There is no denying landlords have been placed under considerable pressure because of the COVID-19 pandemic. Many tenants have found themselves with no or little income, and this has led to many bodies, and people, calling for rental fees to be frozen.

There is no denying landlords have been placed under considerable pressure because of the COVID-19 pandemic. Many tenants have found themselves with no or little income, and this has led to many bodies, and people, calling for rental fees to be frozen.

However, with many landlords dependent on rental income, there would be a devastating impact on many professionals if this was the case. Therefore, there needs to be reasoned debate into how to manage the impact of COVID-19 in the rental market.

Many landlords have lost income because of COVID-19

In a survey conducted by YouGov for the National Residential Landlords Association (NRLA), 22% of private landlords admitted to losing rental income due to COVID-19. 19% of respondents said they lost up to half of their usual rental income and 3% had lost more than of their rental income.

NRLA studies suggest the average loss for landlords was between £751 and £1,000. Applying this figure across the industry suggests private landlords in England have lost between £328m and £437m because of the COVID-19 pandemic.

According to the survey, 9% of landlords say they intend on leaving market completely, and 7% of respondents say they will reduce their rental property portfolio in the next 12 months.

With demand for rental property remaining in place, there is an opportunity for landlords. Yes, there are landlords exiting the rental market, but there are also man y looking to expand their rental property portfolio.

The stamp duty holiday measure assists buyers to expand their property portfolio at a slightly more affordable rate. If you are looking for guidance in this area, please contact Ariston Property today.

What are your property goals for 2020 and beyond?

The survey suggests 61% of landlords only hold one rental property, and within this group, 34% of respondents say they are retired. Therefore, rental income represents all or a significant part of their pension.

The NRLA therefore states it is unsustainable for landlords to allow tenants to allow rent arrears to continue indefinitely. The NRLA is calling for the Government to do more to support landlords and tenants in this challenging time.

There has been work carried out in Wales and Scotland that many professionals in England would like to see replicated in England.

Landlords and tenants can work together

Ben Beadle is the Chief Executive of the National Residential Landlords Association, and he said; “Where COVID-19 has caused difficulties for tenants, the vast majority of landlords have reached agreements with them to avoid problems. That said, most landlords are not property tycoons and cannot be expected to go indefinitely without any or only part of the rent they are owed.”

Ben continued by saying; “To date there has been no direct financial support for the rental market, with individual landlords unable to access small business grants or bounce back loans. The furlough scheme is due to end, benefits do not cover average rents in any given area and the mortgage deferral scheme only builds up the amount landlords have to pay for the remainder of the term of their mortgage. The Government needs to step in and ensure tenants and landlords in England have the same level of support being provided in Scotland and Wales to pay off rent arrears and sustain tenancies.”

We know these are challenging times, but if you have any questions about the local property market, please feel free to contact us. At Ariston Property, we aim to support the local community as best we can, and we look forward to assisting you in any way.