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Coronavirus could cost BTL landlords almost £15bn in lost rental income

The devastating impact of the Coronavirus could cost buy-to-let landlords nearly £14.9bn should tenants be unable to pay rent during the three month support period announced by the government last week, new research shows.

The government has announced that they will suspend new evictions and halt new possessions proceedings to the court in light of the COVID-19 pandemic. 

If tenants are unable to pay their rent, Ome calculates that this would leave landlords £14.9bn out of pocket over a three-month period. 

The deposit replacement scheme’s findings are based on the fact that there are 5.2m households currently within the private rental sector alone and without the ability to work and pay their rent, the buy to let sector could see a loss of £4.97bn every month based on the average monthly rent of £955 alone. 

Nationally, this lost income is highest in England with potentially £11.6bn lost in rental income, while London is home to the biggest sum regionally with a potential £4.9bn lost in three months alone.

There are some 2.6m landlords operating within the UK buy to let sector meaning the average landlord has a portfolio of two rental properties. With an average rent of £955 and a loss of three months’ rental revenue across both properties, they could be facing an individual £5,730 shortfall in rental income.

With a ratio of 2.1 properties per landlord in Scotland, the loss is at its greatest at £6,146 over three months with Northern Ireland also high at £6,083.

Co-founder of Ome, Matthew Hooker, commented: “It’s great news that the government are providing some financial respite for the nation’s landlords, however, it’s more of a weekend away than a holiday and once expired, UK landlords are still facing the cost of a buy to let mortgage without the rental income to pay it.

“It’s by no means the fault of the tenant if they are unable to pay but there is a very real chance that landlords will turn to the rental deposits at the end of a tenancy in order to recoup this lost rent. While this would be unfair on a tenant who has otherwise kept the property in good order, it may well be the case that landlords are simply left with no choice.  

“The silver lining at least is that hopefully, not all tenants will be unable to pay their rent and so this sum of lost rental income should reduce, but whichever way you look at it, the UK rental sector is in for a tough few months.”

  • Mark Wilson

    And from there, isn't it likely that wages will fall and so will rents. Lower interest rates do not signify higher returns they explain lower returns.


    No not at all. The PRS has been shrinking at a rate of around 1000 properties a week for some time. When we start emerging from this mess it's extremely likely, well a certainty really that the rate will increase. That will sustain rents and may even cause rental inflation.

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    Next years headline for you Marc

    “Tenants paying £14.9 Billion more in rent in 2021”

  • David Lester

    If unable to work they get 80%, therefore can agree 80% of rent!


    That would seem like a fair compromise, but I'm not holding my breath on that one.

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    most landlords have an interest rate set in the tenancy agreement for unpaid rent in arrears.

     G romit

    The Tenant Fee Ban legislation sets the maximum rate of interest & is pathetically low.

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    Well its not just a few tough months is it ? The powers that be and other outsiders with no housing input have been making laws and chipping away at us in recent years particularly.
    They are so naive they think it only affects private rental LL's, has it not occurred to them that many of them own their own residential property whether a house or flat where they live. Its true that when they want to up-size or down-size its very often the private LL that has bought their old property ensuring that they got a good price. When you collapse private rental sector 2.5m LL's housing 20m people, bang goes the value of property as well can you not see that.
    The idea that rents or house prices will increase is madness, this was well on the cards ever before Corona, affordability you forget this little fact, then building thousands of subsidized flats clearly not required, over priced by a country mile, for Developer buyers Zero SDLT & Small Deposit just to rope them-in obviously a millstone around their necks for rest of their lives. There is no Zero SDLT exemption for us regular LL's who have supplied quality affordable housing to the market for decades but a huge tax penalty of additional 3% on top , plus taxed on income instead of profit, so anyone that thinks all will be fine good luck to you.

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    No doubt landlords with take some pain (with govt rubbing its hands in glee at the thought). However, it will obviously not be as much as £15bn:

    A certain proportion of rents are direct payments from UC even if fewer than used to be the case.

    It is likely that most tenants will continue to be paid once the government have sorted out a suitable support package, so they will have no reason to need a payment holiday. In any case, the rent is just deferred rather than cancelled.

    As they won't be spending a substantial chunk of their income on non-essentials like eating out and other entertainment like most people do, a fair few may actually find themselves better off until things return to normal.

    So when it comes to it, this is yet more irresponsible scaremongering.


    Yes the rent is deferred not cancelled. If the government steps in and pays everyone then there will be no issues going forward other than 1970’s tax bills

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    I have a vested interest in a healthy housing market so I wouldn't scaremonger. I just tell it how it is and might save a few people from getting burned, if you were eluding to me.

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    Any help at all for mortgage free landlords who's rental property is their pension when tenant unable to pay rent?


    Of course not Jean, I'm 66, and after 30 yrs as a landlord am mortgage free, I think I'm lucky though, all but one of my tenants are good honest hard working people who I feel I can trust, the one who is not will likely find herself homeless next winter

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    What about landlords who have empty properties which cant rent at the moment but still have to pay council tax,also tenants who are sub metered but cant pay their bills,also landlords who dont have mortgages but dont get any help,i hate to say but thats me,im sick of being penalised for everybodys problems and nobody gives a damn about landlords,when this is over im going to sell them,i advise you to do the same maybe they will appreciate landlords when theres a housing crisis and the tax payers and government can pay out to house all the homeless.

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    I am a landlady whose rental income is her only income and although I don't have mortgage payments more than half of what I receive goes to high expenses of the building where my flat is, few loans, regular bills and my own rent payment with living expenses. There is no provision or help for people like me. Is there any effort to get help from the government for landlords in my situation?


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