Research by leading lettings management platform, Howsy, has revealed the vast amount of lost earnings that landlords in England could be facing when the eviction ban is lifted.
There are some 4.5m private rented households in the UK rental sector, supplied by an estimated 2.2m landlords.
However, a survey by Shelter recently revealed that as many as 230,000 UK tenants have fallen into rent arrears as a result of the pandemic. With the ban on tenant evictions now extended until 20 September, landlords who have received no rental income for the full six-months are facing rent arrears to the tune of £5,058 in England.
But, it isn’t just the ban itself that will see landlords severely out of pocket.
The notice period required to evict a tenant has been increased to six months, with the process of applying for a possession order and then an eviction date generally taking a further five months after that, although this is likely to be substantially longer given the massive backlog of cases.
With landlords unable to start eviction proceedings until the ban has lifted at the end of September, they could be facing a further 11 months of rental arrears before they can evict a tenant.
With the average rent in England currently £843 per month, this means landlords will be out of pocket a further £9,271, a total potential total loss of £14,331 when considering the six-month period some have already incurred due to the ban itself.
Should the 230,000 tenants already in arrears fail to catch up on payments and face eviction, the buy-to-let sector could be about to stomach a further £2.1m in lost revenue.
Founder and CEO of Howsy, Calum Brannan said, “Although the current situation we’re facing is no fault of the nation’s tenants, it is simply unfair to expect landlords as the backbone of the rental market to foot the bill for unpaid rent. Not only has the ban been extended but landlords must now face an increased eviction notice period before they can even commence court proceedings.
“With such an unprecedented backlog, there will no doubt be sizable delays that could see landlords face an even longer wait before they can reclaim their bricks and mortar investment. As a result, some could be facing in excess of a year without any rental income.
“The Government is yet to provide any form of help other than the rather pitiful buy-to-let mortgage holiday which, in some cases, can impact a landlord’s financial credentials further down the line.”