Propertymark urges government to tackle tenant debt to avoid landlord exodus

Estate and Letting agent trade body Propertymark has warned the government to tackle Covid-induced tenant debt and reform the court system.

Otherwise it said landlords could leave the sector in droves, as a survey from The Mortgage Works found that 20% of landlords are likely to sell property in the next 12 months.

Propertymark warned of “catastrophic” consequences for the housing system if so many landlords call it quits.

Moving goal posts, tax implications, tenant debt and a backlog in the courts are reasons many smaller portfolio landlords are being left with little options, according to Propertymark.

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 5 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.”

The UK government previously stated that for, “most landlords, income from rent makes up 42 per cent of their total gross income, making them highly vulnerable when their tenants build up rent arrears.”

The proportion of private renters in arrears tripled during the pandemic, from 3% between April 2019 and March 2020 to 9% during November and December 2020.


Comments 1

  1. It will be an icy day in hell when the Government does anything for private landlords other than slap more and more regulations on us and bolster tenant rights.
    According to Statistica there are around 4.5 million homes in the private rented sector that are known about. At an ONS average of about 3.3 persons per home that means the private rented sector houses potentially 15 million or more people. So actually the PRS is doing a good job and covers up the failure of successive Governments to house their own citizens affordably.
    Our reward for this is to be portrayed as evil, rich, money grabbing parasites preventing people from buying their own houses by snapping them all up to rent. Every time shelter and Generation Rent applaud (and the NRLA condone) each extra bit of burden on the PRS they are actually making things worse for tenants.
    Landlords will give up and sell up. It won’t be catastrophic as the article suggests. There won’t suddenly be a glut of 4.5 million homes on the market reducing prices. It will happen slowly, so house prices will not be overly affected. Meanwhile, homes to rent will gradually start to become scarcer and rents will rise as tenants scrabble to find places like they did in the seventies, when I was briefly a flat hunting tenant myself, where you had to be quick as everything was getting snapped up as soon as it was available.
    For the last year or so we have been slowly refurbishing one of our rental homes wrecked by a tenant. During that time the price of the house even after Council tax and bills has risen by the around the amount of rent we could have realised for it. We could sell it now and get about 20 years rent at today’s prices even after paying CGT and be unaffected by tenant hassles and dreamed up new regulations. Would it be bought by somebody who is currently a tenant? Probably not, as generally the fact they are renting indicates they can’t afford to buy. It would probably go to somebody lucky enough to be funded by the bank of Mum and Dad.
    So will we rent it out again? Maybe, but not without getting a valuation first!

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