Rent arrears putting landlords under pressure
Rent arrears are putting landlords under increasing pressure, the National Residential Landlords Association claims.
Landlords have faced a series of challenging changes over the last few years. Loss of tax relief, stricter lending criteria and stamp duty changes have all had an impact on the financial viability of buy-to-let property. Now it seems economic woes as a result of the pandemic are only going to add to this pressure. New research by the Joseph Rowntree Foundation has suggested that as many as 200,000 private rental households are currently in arrears. That figure equates to 5% of all private rental properties.
The National Residential Landlord Association suggests that the Chancellor has now exacerbated current difficulties by cutting the amount that tenants on benefits will be able to claim to pay their rent. According to a report by the Office for Budget Responsibility, the Local Housing Allowance will be frozen from 2021. This means the allowance will not take rent rises into account and, in real terms, the rate will fall below the current level which is set to cover the lowest 30% of rents in any area.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Many renters and landlords are struggling with the consequences of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this.
“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”
Danny Luke, Quick Move Now’s managing director, commented: “We know that the climate has been increasingly challenging for landlords over the last few years. This has led to around 30% of landlords planning to sell at least one property.
“Covid-19 will have a financial impact on all areas of life. Unfortunately, by freezing the Local Housing Allowance, the risk is that those who are struggling the most will be put under even greater financial pressure and have more difficulty being able to pay their rent.
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