UK rental guarantor service Housing Hand states that the Government’s eviction ban is creating an increasingly difficult situation for many landlords.
The legislation has been designed to protect tenants who have suffered financial loss as a result of the COVID pandemic. However, the guarantor service says some landlords are facing not just losing their investment properties but their homes as well.
Jeremy Robinson, Group Managing Director of Housing Hand, says: “The intentions of the eviction ban to protect individual tenants are excellent, but the situation unfortunately doesn’t take all those involved in the rental transaction into account. The financial impact of tenants who can’t afford to pay on landlords is devastating.”
The guarantor service highlights research by LSE London and Trust for London states the number of private tenants in rent arrears in England could become three times higher this year.
Housing Hand points out that letting agents are also suffering. They receive a percentage of a property’s rent as a management fee, which they are missing out on when rent payments are not being made. It says there is a limit to how long agents and landlords can continue to operate with a reduced income. Client Money Protect reported at the end of 2020 that lettings agencies were closing at a rate of ten per week. Housing Hand believes that around 4% of all letting agencies closed their doors for good during the year.
The eviction ban is currently due to run until 21st February but could be extended in line with continuing lockdown restrictions. If this does happen, landlords and the letting agents could continue to struggle financially. For those with mortgage payments to cover, the situation is increasingly unsustainable.
Terry Mason concludes: “The Government must stop using private landlords to house tenants who are unable or unwilling to pay their rent. These are difficult times for all concerned and a new solution is needed – one that supports all those involved in the rental sector.”