The majority of buy-to-let landlords have been adversely affected by the pandemic, with many seeing lost rental income due to arrears, new research shows.

According The Mortgage Lender, 65% of landlords have suffered financially due to the impact of Covid-19, and there are fears among some that the worst could be yet to come.

Some 45% of respondents are worried that their investments would be impacted by a recession, while 41% fear that there will be a potential hike in unemployment levels over the next two years.

Of those investors who have already suffered financially, more than a quarter – 28% – reported rent arrears and 18% had tenants who left their rented property.

The study also revealed that almost a third – 31% – of landlords dread the prospect of an increase in taxation, which would undoubtedly have a negative impact on their portfolios, while a fifth – 21% – believed that growing demand for more space at home to work could see more people move out of inner-city properties.

Student property has often proved to be a very profitable asset class giving robust returns, but 14% of landlords expect to see a fall in student numbers at home, while 15% predict a decline in those coming to study from abroad.

Steve Griffiths, sales director at The Mortgage Lender, commented: “Landlords are facing an uncertain future with many moving parts.

“And there is some evidence that the pandemic could change the structure of the buy to let market in a more fundamental way than any of us could have anticipated at the beginning of this year.

“With the City of London currently deserted and many larger employers considering work from home policies as a more permanent solution there could well be a longer-term change in the types of properties tenants will find attractive.

“Despite the uncertainty landlords understand that property investment is a long-term strategy.”