Just a Small Increase in Late Rental Payments Amid Coronavirus Lockdown
At a time when lockdown rules have seen numerous employees lose some or all of their income due to being furloughed or even losing their job, research suggests the number of rents that are being paid late has risen by only a small proportion. That means that even though times are tough for many UK residents, the vast majority are still managing to pay their rent or have come to an agreement with their landlord.
A new study from property tech firm Goodlord shows that as expected, some UK tenants are struggling to meet their rental payment obligations. However, thanks to forbearance by landlords and good communication, the proportion of late payments of rent – where rent is paid seven or more days after the due date – has risen just 2% to 6% of all rent payments.
Landlords, Tenants and Letting Agents Work Together
The research covers rental payments due between March 11 and Mid-April 2020 and highlights that even though lockdown has affected many people’s ability to work as they normally would, many tenants are still able to pay their rent. In addition to the small rise from 4% to 6% in the proportion of late payments, the study also shows that the number of landlords making a claim against their landlord insurance remains below 1%.
According to Goodlord, there are a number of reasons that the proportion of late rent payments remains low:
- The Government Furlough Scheme.
- Supportive Landlords.
- Discussion over payment plans.
However, while some 40% of letting agents said the landlords they work with are being supportive, around 84% of survey respondents also said there was still some confusion over rent payment obligations. Indeed, some tenants didn’t realise that they should still pay their rent if they’re able, while emergency rules are in place.
Thanks to support from landlords and letting agents, suitable rent payment plans are being put in place, where required, either for a period of non-payment or where tenants can pay less than their usual weekly or monthly rent.
“Despite only being a month since lockdown began, the late payment figures for the rental industry are so far fairly steady. They show that the overwhelming majority of tenants are still able to meet their obligations and we believe the Government’s furlough scheme will no doubt be playing a key role in this continuity,” said Goodlord’s Chief Operating Officer and Co-Founder, Tom Mundy.
“At the same time, agents and landlords are gearing up to offer more support in the months to come. Many agents, along with their landlords, are thinking about how they can offer flexibility, support, and guidance to tenants who might start to struggle,” Mundy added.
More Rental Regulation Ahead?
While the lettings industry is working hard to keep the industry running smoothly, a recent rental standards webinar highlighted the view that more regulation for landlords and letting agents could be on the way.
Speaking at the webinar, ARLA Propertymark’s chief executive said that once the Covid-19 crisis has passed, he anticipates the Government will introduce more property standard rules to the lettings industry. With that in mind, the professional lettings body added it is currently working on its own plan for letting agents and landlords that would satisfy possible government expectations of the industry.
“[Post-crisis] I think they’re going to be looking at more regulation of landlords. I think we will go into a much tougher regime on property standards” ARLA Propertymark’s Chief executive David Cox told the webinar audience.
“We are trying to get out ahead of that with the concept of a property MOT; if we can try and shape what comes next, it’s going to be much easier for the industry to accept than to have a whole collection of laws thrown at us like we have over the past 10 years” Cox added.
Right now, it’s difficult to know what lies ahead for the UK once the coronavirus crisis has completely passed. However, the expectation is that things will change across many different areas of people’s lives.