In its representation to the chancellor’s Autumn Budget and Spending Review 2021, Propertymark argues that without a support package for tackling Covid-induced tenant debt and a reformed court system landlords could leave the already struggling sector in droves.
The trade body points to a recent Mortgage Works survey that shows a fifth – 20% – of landlords are considering selling all – or at least part – of their portfolios in the next 12 months.
Propertymark cites a combination of moving goal posts, tax implications, tenant debt and a backlog in the courts as reason many smaller portfolio landlords are being left with little options.
For many buy-to-let landlords, income from rent makes up a significant proportion of their total gross income, making them highly vulnerable when their tenants build up rent arrears.
Propertymark says the effect on landlords has been compounded over the pandemic and official government figures show the proportion of private renters in arrears has tripled during the pandemic, from 3% between April 2019 and March 2020 to 9% during November and December 2020.
Propertymark has warned that if the upward trend in this data continues the number of renters in arears could reach almost 800,000 by the end of 2021.
The trade body argues that an exodus of landlords would be catastrophic for the housing system, including the many people who rely on the PRS to meet their housing needs.
Mark Hayward, chief policy advisor for Propertymark, said: “We are urging the UK government to look at the bigger picture here. It’s not about propping up landlords but more about doing the right thing for the country as we work to build back better from the devastating effects of the pandemic.
“Ultimately the housing system needs to work for everyone, but landlords are being asked to carry too much of the financial burden caused by the pandemic. We are risking good landlords leaving the market.
“The private rented sector supports five million households in the UK and is an important provider of homes against a backdrop of an overwhelmed social housing system.
“However, at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated Covid-related debt is inadequate.”