Many tenants have been laid off, furloughed, or have seen their incomes plummet because of the response to the coronavirus outbreak, and yet there has only been a 2% increase in late rental payments, according to new research.
Given that many people have lost jobs or income because of the coronavirus pandemic, there were concerns that a higher number of tenants would not pay their rent, and so the findings from the study by property technology company Goodlord will be welcomed by some landlords.
Goodlord analysed payment trends from a representative sample of 20,000 UK rental properties.
In addition, only a small fraction of landlords are processing rental insurance claims, indicating that they are not yet out of pocket.
Since March 11th, there has been a modest increase in late payment behaviour - 2% more properties than usual still owing rent after seven days. This is an increase from 4% to 6%.
Likewise, claims from landlords against Rent Protection insurance policies remain comfortably below 1% of rented properties covered.
However, 84% of the 124 letting agents surveyed have reported confusion amongst tenants, with many not realising they remain under obligation to pay rent.
Of those surveyed, seven out of 10 - 70% - said that they have agreed payment plans with less than 10% of tenants so far, further indicating that the financial impact of the pandemic has yet to impact the ability of most tenants to meet their rental obligations.
Tom Mundy, COO of Goodlord, said: “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.
“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.”