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Landlords and tenants have been struggling since the pandemic hit. A mix of job losses and a moratorium on evictions has respectively cost landlords and tenants dearly. Data published by a lettings platform shows that in 70% of areas, the average rent has fallen since the country entered lockdown.
Rents in Decline
Rents in England have declined by -3.4% and in Wales, rents have fallen by -0.9%.
London is the worst-hit region, with rents there falling by -7.9%. Many London tenants work in the hospitality sector, where job security is uncertain at the best of times. Many landlords in London have switched from short-term lets to long-term rentals, in a bid to cover the loss of tourism income. Data from Hamptons showed that the number of homes to rent has risen by 11% since the end of March.
The only regions to show an increase in rental income are the North West, North East, and East Midlands, with figures at 1.3%, 1%, and 0.1% respectively. Whilst some increase is a good thing, this is well below the rate of rental growth seen in the early part of this year.
Long-term Impact on the Private Rental Sector
Experts are warning that this catastrophic fall in rental income is likely to have an equally catastrophic impact on the private rental sector.
It’s likely that some of these landlords will decide to sell up and leave the sector. Significant exit from the sector will lead to a lack of affordable housing for those families who can’t afford to buy.
“…while the plight of the nation’s tenants is an unfortunate one, expecting landlords to shoulder this financial decline with no help has dire consequences for the rental market going forward,” says Calum Brannan from Howsy.
New Mediation Service for Landlords
There is some light at the end of the tunnel in sight for landlords. The courts reopened on 21 September, and eviction cases are now being heard once again. Due to the enormous backlog of cases, it could take months for landlords to secure a possession order. Tenants may not be paying the rent during this time.
If you’re currently waiting to evict a tenant (or thinking about doing so), you will be interested to hear that Landlord Action, the eviction and housing law specialists, have formed a partnership with the Property Redress Scheme.
Any landlords who use Landlord Action’s services to help them service notice and evict a tenant can now take advantage of the Property Redress Scheme’s mediation service. The aim is to try and help landlords and tenants come to a peaceful solution, without taking matters to court. If an agreement can be reached, it will be formalised with a written and legally binding document. This should help to speed things up, relieve some of the pressure on the court system and provide a much happier outcome for tenants and landlords.
“Since the Property Redress Scheme launched its mediation service back in April it has settled 45% of the cases it has been instructed to mediate on. I’m confident that Landlord Action and the Property Redress Scheme will help thousands of landlords get their property back,” says Paul Shamplina from Landlord Action.
You can find out more about mediation here.
