Half of landlords in Scotland have indicated that they will snub the Scottish Government’s interest-free loans despite tenants struggling with meeting rental repayments.
As EYE reported yesterday, the Scottish Government’s £5m Private Rent Sector Landlord COVID-19 Loan Scheme lets certain landlords apply for a loan to cover lost rental income for a period of up to six months, backdated to March 1st 2020.
However, a poll of more than 200 landlords by Edinburgh-based agent Portolio, suggests there may not be too much take-up, with 52.9% of respondents stating that they wouldn’t consider applying.
This was despite the same survey showing 39.4% have tenants who are unable to pay rent and 11.1% have received requests for a rental holiday.
Only 13.7% of landlords said they have applied for a buy-to-let mortgage payment deferral from their lender.
Ross Macdonald, co-founder of Portolio, told EYE that many landlords were apprehensive about taking on debt from the loans and also are suspicious of how they would be treated by banks if they take a mortgage deferral.
He said: “A lot of landlords are dealing with tenants directly and coming to their own arrangements, based on the individual situations, about discounts on rents that work for both parties.
“More than half of tenants are already experiencing difficulties paying the full rent, and with two further rental payments due before lockdown restrictions are expected to be eased, this percentage is likely to rise.
“Many landlords advised that should rental payments continue to be disrupted then they are likely to experience difficulties paying their buy-to-let mortgages.
“It is a worrying situation for both tenants and landlords.”
Comments (3)
Yes, it is ridiculous. I mention it in my article, published today on CapX. https://capx.co/extending-eviction-bans-is-a-gift-to-non-paying-tenants-and-a-nightmare-for-landlords/
If the Government are going to be so ridiculous as to suggest a landlord should take out a loan to cover a tenants rent payments then may I suggest as an alternative that the Government issue special rent style credit cards to tenants that are issued and controlled via the credit card companies/Banks that can only be spent on rent. Maybe the landlord would log on to the tenants own credit card rental portal to collect payment. Think of the upside to this scheme Mr Government, you will have a landlords details for tax purposes.
Now surely thats a better winner all round. Perhaps you only allow the landlords to access the portal via a landlord organisation such as NRLA which will then demonstrate to the Government that this landlord then wishes to work to best practice. New membership to a professional landlord association empowering best practice in the industry.
Agree with a lot of what you say Jim, other than the ‘ Loan ‘ ( which I disagree with, more later ) should only be available to the 2% of Landlords who are members of only ONE of a number of landlord bodies.
I’m not surprised Landlords have snubbed the idea, – what an Insult to Landlords to suggest LANDLORDS, should take out a loan on behalf of their tenants default.- debt.
Let the Govt LOAN it to Tenants and then they’ll experience the difficulty getting money out of Tenants that landlords are used to.
You really have to question the mentality of those that dreamt this scheme up !