There could be 700,000 private tenants in arrears by the end of this year – an unsustainable burden on agents and landlords, an industry supplier fears.
Rental guarantor service Helping Hand says landlords and agents are increasingly suffering because of the continuing eviction bans,.
This indirectly leads to many investors not only losing income from tenants but also being at risk of losing their homes because of financial pressures.
Letting agents receiving a percentage of rent as a management fee, are losing out too because – as Housing Hand puts it – 15 per cent of £0 is £0.
The firm notes that Client Money Protect reported at the end of last year that lettings agencies were closing at a rate of 10 per week, and Housing Hand itself suggests around four per cent of all lettings agencies shut their doors for good in 2020.
“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” explains Jeremy Robinson, group managing director of the firm.
He warns that the clock is ticking and cites research from the London School of Economics and Trust for London – a social policy group – that the number of private tenants in rent arrears in England could treble in the coming year. That would take the total up to 700,000.
The current ban, which applies to bailiff-enforced evictions, runs until Monday week, that’s February 22 – there are already calls from pressure groups and some local authorities for the government to issue yet another extension.
This post has originally been featured in Letting Agent Today.