Coronavirus damage to rental sector could hit £15 billion – claim

Coronavirus damage to rental sector could hit £15 billion – claim


Todays other news


New research suggests the damage to the private rental sector in terms of non-payment of rent could be a remarkable £15 billion.

A study by the deposit replacement scheme Ome shows that landlords could be out of pocket by £14.9bn should tenants be unable to pay rent during the three month support period announced by the government last week.

Some landlords will benefit from a three month mortgage holiday but they will still have to pay the three months when it is ‘shifted’ to the end of their mortgage term.

Ome’s research shows that there are 5.2m households currently within the private rental sector alone and without the ability to work and pay their rent, the buy to let sector could see a loss of £4.97 billion every month based on the average monthly rent of £955 alone.

Over three months this climbs to £14.9 billion.

Nationally, this lost income is highest in England with potentially £11.6 billion lost in rental income, while London is home to the biggest sum regionally with a potential £4.9 billion lost in three months alone.

There are some 2.6m landlords operating within the UK buy to let sector with each typically having two rental properties. 

With an average rent of £955 and a loss of three months’ rental revenue across both properties, they could be facing an individual £5,730 shortfall in rental income.

With a ratio of 2.1 properties per landlord in Scotland, the loss is at its greatest at £6,146 over three months with Northern Ireland also high at £6,083.

Not only does this sum have implications on a sector that has already seen its financial return stretched by the government, but Ome says it could see tenants out of pocket even further should landlords look to keep their tenancy deposit to account for lost rental income.  

Share this article ...

Join the conversation: Login and have your say

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions. All comments are screened using specialist software and may be reviewed by our editorial team before publication. Letting Agent Today reserves the right to edit, withhold or delete comments that violate our guidelines, including those that harass, degrade, or intimidate others. Users who post such content may be banned from commenting.
By commenting, you agree to our Commenting Terms of Use.
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Recommended for you
Related Articles
Some 7,700 homes have been lost in one year in...
Does the Landlord and tenant Act 1954 need bringing up...
The Second Reading of the Bill takes place tomorrow...
Propertymark and the NHBC are concerned about labour shortages...
The Welsh Government is backing the call for a 'compensation'...
There will be a greater emphasis on digitisation....
A consultation document is being released today....
Recommended for you
Latest Features
Andrews Property Group is under charitable ownership...
New tenancies in England and Wales are at their lowest...
The Scottish system would differ from the UK system in...
Sponsored Content
Tenants want a place they can call home—somewhere comfortable, safe,...
Letting agencies face the dual challenge of keeping both landlords...

Send to a friend

In order to send this article to a friend you must first login. Click on the button below to login or sign up.

No one likes pop-ups ...
But while you're here