Twenty-two per cent of private landlords with properties in England have lost rental income as a result of COVID-19, according to new polling.
The research, conducted online by YouGov for the National Residential Landlords Association, found that whilst 19 per cent of those questioned had lost up to half of their usual rental income as a result of COVID-19, three per cent had lost more than half.
An analysis of the results by the NRLA suggests that among those landlords surveyed saying that they have faced a loss of rent, the average (median) loss was between £751 and £1,000.
Applied across the sector as a whole, this suggests that the total rental income lost by private landlords with properties in England as a result of COVID has been between £328m and £437m.
The same survey shows nine per cent of landlords say they plan to leave the market altogether with seven per cent saying they will sell some of their rental properties over the next 12 months.
This would serve to choke-off the supply of available homes for those unable to afford a home of their own, those struggling to access social rented housing and those who prefer the flexibility that the private rented sector provides.
With the polling showing that 61 per cent of landlords surveyed rent out just one residential property, and 34 per cent of those saying they are retired, with rental income representing all or part of their pension, the NRLA argues that it is unsustainable to expect landlords and tenants to be building up rent arrears indefinitely.
Ahead of the courts beginning to hear possession cases again on 20th September, the NRLA is calling for an urgent financial package from the Government to pay off COVID related rent arrears and sustain tenancies.
The NRLA proposes that the UK Government follows the examples set in Wales and Scotland and develops interest free, government guaranteed hardship loans for tenants to cover arrears built since lockdown started in March.
Ben Beadle, Chief Executive of the National Residential Landlords Association, 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.
“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.”
YouGov carried out the online survey of 1,008 residential landlords with properties in England. The fieldwork was undertaken between 1st – 3rd September 2020.
Those surveyed were asked how much the total proportion of their usual rental income they have lost to date from their rented properties, as a result of Coronavirus (COVID-19). The results were as follows:
No lost income 76%
Less than 10% loss 6%
10% to 20% loss 7%
21% to 30% loss 3%
31% to 40% loss 1%
41% to 50% loss 2%
More than 50% loss 3%
Don’t know 1%
Prefer not to say 1%
In total 232 landlords said that they had lost rental income as a result. They were asked how much the average arrears were on those properties that had them. Taking out those who said “don’t know” or “prefer not to say” the total number of respondents was 172. The results were as follows:
Up to £250 32 18.60%
£251 to £500 15 8.70%
£501 to £750 23 13.40%
£751 to £1,000 19 11%
£1,001 to £1,500 23 13.40%
£1,501 to £2,000 16 9.30%
£2,001 to £2,500 13 7.50%
£2,501 to £3,000 10 5.80%
£3,001 to £4,000 9 5.20%
£4,001 to £5,000 3 1.70%
More than £5,000 9 5.20%
Median debt levels per landlord based on the above were £751-£1,000.
All 1,008 respondents were asked what strategies they would be putting in place over the next year. 9% said they were likely to stop being a landlord completely. 7% said they would sell some of their portfolio.
61% of respondents said that they rented out one property. 34% said they were retired and that rental income represented all or part of their pension.
Cost of tenant loans scheme:
Number of landlords in England – MHCLG’s Private Landlord Survey for England puts the number of landlords who have registered with a tenancy deposit scheme at 1.5 million. This figure does not reflect those landlords who do not take a deposit. HMRC has put the number of private landlords in England at 2,266,770.
The problem with this figure is that it includes cases where, for example, couples rent properties together but submit separate tax returns, thus ‘double counting’ some tenancies. The NRLA has therefore taken the mid-point of both these figures with a rounded number of 1.9 million private landlords in England.
Landlords who have lost rental income – The YouGov polling suggests that 23% of landlords have lost some rental income as a result of COVID-19 (this includes the 19% who had lost up to half of their usual rental income as a result of COVID-19, the 3% who had lost more than half and the 1% who do not know what the level of their losses were). Across England has a whole that would be 437,000.
Level of landlords lost rental income – The polling puts the average rent debts per landlords affected at between £751 and £1,000. Across the 437,000 landlords identified above this would come to a total amount of between £328.2m and £437m.