In our latest research we asked safeagent firms to give their thoughts on the state of the market, and how tenants and landlords are faring during the pandemic.
Arrears – While agents indicated that some tenants are facing difficulties, arrears should be put into context.
- 62% of respondents said that the proportion of their tenants who have not been able to pay their rent in full over the past three months was less than 10%. 21% said it was between 10-20% of tenants, and 7% said none of their tenants were in arrears.
- For those who are in arrears, the majority of tenants were only behind by one or two months (39% and 33% respectively) while only 13% of firms said tenants had arrears of more than three months. The highest reason for arrears was due to tenants losing their jobs (58%).
- When asked what route landlords would be willing to pursue as a result of arrears, agents commented that eviction was always a last resort. Payment plans were by far the most popular option at 86%. Potential eviction was 37% and mediation was 26% and 20% said they would sell the property.
Financial support for tenants – In the survey, safeagent firms were asked for their views on interest free loans for tenants.
- Nearly half of respondents (44%) felt they added to tenants’ financial problems, but 38% felt they were a solution. However, those in favour said if such loans were to be introduced in England they must be carefully managed, with 79% saying the loans should go directly to the landlord or agent.
- In comparison, when asked what their landlords would think about the loans, agents said more landlords would think they were a solution (46%). Agents warned that many landlords would only focus on the short term of current arrears being paid off, rather than the longer-term financial impact which could cause tenants to then fall behind with their rent in the future as they struggle to pay off the loan.
Looking ahead to what the biggest challenge facing the sector is, agents were concerned about the end of the furlough scheme, and repeatedly said the extension of possession notices was a real issue. Many said that this, combined with increased regulatory and tax burdens would push more landlords to sell, which ultimately will lead to fewer homes and the risk of higher rents.
Commenting on the findings, Isobel Thomson, safeagent Chief Executive, said:
“Clearly our sector is facing tough times, but where tenants are in difficulty, it is clear that agents are working to support tenants and landlords in finding solutions to repay arrears and keep people in their homes.
“safeagent has real concerns about tenant loans, and we share many of our agents worries that they might only serve to add to debt and cause further arrears in the future. We believe mediation and payment plans are a more effective solution for all parties.”