INTERVIEW: ‘Good dialogue with tenants has kept rent payment defaults to just 10% of portfolio’

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Claim is made by boss of Liverpool property management firm who says ‘tidal wave’ of non-payment has so far failed to materialise during pandemic, but he warns this month’s pay day will be next big test.

The expected “tidal wave” of tenants
not paying their rent has failed to materialise, according to one letting
agent.

City Residential in Liverpool reports that proactively engaging with tenants and landlords has resulted in them both understanding each other’s financial position during the lockdown – and only a 10% drop in its rent roll, rather than the expected 30%, MD Alan Bevan tells LandlordZONE.

“Overall, we’ve been delighted by
the response. At this point in time we have
yet to see the ‘tidal wave’ of non-payment by tenants that many industry
commentators had predicated.”

It has made agreements with about
10% of its tenants over paying reduced rent and Bevan says landlords have been
generally receptive, with some proactively offering to help out if needed.

He adds: “During conversations
over the past few weeks with landlords we have reiterated our belief that it’s
better to have an investment property occupied and rented, even if the rent is
lower than what they have achieved in the past.

“Logically, this is particularly relevant during the crisis when it is very difficult to re-rent a vacant property due to the restrictions on movement.”

Pay day

However, Bevan says that the true
extent of the financial hardship on the city’s private rented sector, or how
rents will be impacted, may only become clearer at the end of the month, nearer
pay day.

He predicts a short-term increase
in supply of apartments to let, partly because many overseas students have returned
home, leaving their properties in the middle of their tenancies.

City Residential has also seen a big increase in landlords, both individual and corporate, who had previously offered short-term lets but now want the safety of a more traditional assured shorthold tenancy rental model.

Read more about rent defaults during Coronavirus.

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