Feb

Landlord Covid losses: ‘Clock is ticking’ leading rent guarantor warns Ministers

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Landlords and letting agents could face months of further financial struggle unless the government props up the private rented sector.

Rental guarantor service Housing Hand believes increasingly desperate landlords are suffering during the evictions ban and that the situation is becoming unsustainable for those with mortgage payments, with some at risk of losing their investment properties or their homes.

According to research by LSE London and Trust for London, the number of private tenants in rent arrears in England could treble in the coming year and mean that as many as 700,000 tenants – and their landlords – are in financial difficulty.

Housing Hand says letting agents are also suffering. “Letting agents receive a percentage of a property’s rent as a management fee, but 15% of £0 is £0,” says group MD Jeremy Robinson.

Reduced income

“This means that there is a limit to how long agents, as well as landlords, can continue to operate with a reduced income.”

Client Money Protect reports that lettings agencies have been closing at a rate of 10 per week and Housing Hand believes that about 4% of all letting agencies closed their doors for good during 2020.

Robinson says the clock is ticking. “The intentions of the eviction ban to protect individual tenants are excellent, but the situation unfortunately doesn’t take all those involved in the rental transaction into account,” he says.

“The financial impact of tenants who can’t afford to pay on landlords is devastating.”

Terry Mason (pictured), group operations director, adds: “The government must stop using private landlords to house tenants who are unable or unwilling to pay their rent. These are difficult times for all concerned and a new solution is needed – one that supports all those involved in the rental sector.”

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