Propertymark, Estate and Letting agent trade body has warned the government to tackle Covid-induced tenant debt and reform the court system.
They say that landlords could leave the sector in droves. A recent survey by The Mortgage Works has found that 20% of landlords are likely to sell property in the next year. If so many landlords exit there would be catastrophic consequences for the housing system.
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 and they are urging the government to look at the bigger picture.
It is 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. 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. There is a serious risk that good landlords will leave the market.
The private rented sector supports 5 million households in the UK and is an important provider of homes. 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 knows that many landlords rely on the rent to make up their income as they have previously stated that rental income makes up 42% of their total gross income which makes them vulnerable when 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.