The impact of the pandemic is likely to be felt for quite some time to come, across all sectors of society, so it may well be wise to have contingency plans in place just in case we return to lockdown situations in the future.
For landlords, one of the main concerns over the last year and a half has, no doubt, been whether or not rents will be met. In fact, new research from Shawbrook Bank has just revealed that 46 per cent of landlords around the UK reduced the monthly rent payments for their tenants because of the pandemic.
Reported on by UK Investor Magazine, the study found that 28 per cent opted to all
ow tenants a full rent payment holiday of up to three months where the occupants weren’t required to pay any rent.
Those landlords who did offer payment holidays said they lost £7,500 on average, compared to those who opted for rent reductions, who lost £6,500. Common reasons for reductions and payment holidays included redundancy and furlough concerns, as well as job security.
Managing director of property finance at Shawbrook Bank John Eastgate was quoted by the news source as saying: “No amount of foresight could have prepared landlords, or tenants, for the impact of the pandemic.”
“During this incredibly difficult period, landlords acted pragmatically, recognising the additional strain their tenants were under. In fact, in many cases landlords were initiating the conversation around cutting rents to ease their financial burden.”
Further research into the financial impact of the coronavirus crisis on landlords, this time carried out by Simply Business, has revealed that 21 per cent plan to sell property because of the pandemic, with 51 per cent losing out on rental income over the last 18 months.
According to Business Leader, the study found that 47 per cent of landlords have already lost between £2,001 and £10,000 because of the crisis. Some 27 per cent of tenants were left unable to pay rent, which meant that 25 per cent of landlords had to make use of their savings to account for the shortfall in income.
Of those asked, 29 per cent said it would take them between six months to two years to recoup the losses in rent, while eight per cent said they’re still finding it hard to secure suitable tenants for their empty properties.
However, despite the challenges that the last 18 months have thrown their way, 31 per cent of landlords say they’re still positive about their future in the rental sector. Some 59 per cent still believe that letting property is a worthwhile investment, which is a good sign for the future of the rental market.
For help with property management in Havering, get in touch with Delta Residential today.