Tenant arrears have grown by more than 30% in some cases during the pandemic, lettings agents have warned.
A state of the industry survey among 350 agents by lettings platform Goodlord found two thirds of respondents reported an increase in tenant arrears.
It comes after the Government confirmed the introduction of a six-month notice period for evictions until at least March 2021 except in cases of domestic abuse, anti-social behaviour and serious arrears.
Half of those who said that arrears had increased said that they had seen an increase of up to 10%, a further 15% said they had increased by between 11% and 20%.
Another 11% said arrears had increased by between 21-30%, while 6% reported arrears had increased by more than 30%.
Coronavirus related concerns now dwarf Brexit, with 20% of property professionals stating it was their main concern compared with just 2% worried about a no deal Brexit.
Legislation and compliance are still a significant concern though, with a third of respondents putting it ahead of Covid-19.
Meanwhile, 43% of respondents said that their main priority in 2020 was winning new landlords.
The majority, 84% of respondents, said that they were confident their own businesses had the financial resources to continue operating for the foreseeable future, with only 3% of respondents saying they were either not confident or didn’t know.
Tom Mundy, chief operating officer for Goodlord, said: “We’ve always known that the lettings industry and those working in it are incredibly resilient.
“But the past six months have proved that they can weather the most intense of storms.
“After a full industry shut-down, followed by an unprecedented period of demand, the market is demonstrating the strength of its foundation.
“Whilst concerns remain in the market – from compliance to Covid-19 complications – optimism remains very high and industry professionals are feeling confident about the future.”
Comments (2)
Only 1 tenant in my area is still in arrears and has done a bunk. Careful management of less than 1% of our managed portfolio mean all arrears are now up to date.
If arrears is 5% in a normal period before the virus outbreak. It will be less in some and more in others and housing benefit makes a difference. During the outbreak arrears have increased by 30% according to this PR article. Which means a rise from 5% to 6.5%? It’s hardly life changing.
The most worrying statistic is that 3% of respondents didn’t know whether they have enough cash to continue trading. They don’t know! Imagine how long it must take them to tie their shoe laces each morning. Someone like this shouldn’t be collecting rents if they can’t manage their own finances.