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TODAY'S OTHER NEWS

Fresh data exposes ‘the threat that coronavirus poses to the rental market’

New research shows that renters are more vulnerable to economic shocks compared to homeowners. 

Renters typically spend a higher proportion of their budget on essential items that cannot be cut back, with 61% of the usual weekly budget spent on essentials, compared to 52% with homeowners, according to a new report from the Office of National Statistics (ONS). 

This is largely driven by housing costs, which account for 28% of budgets for renting households and 21% for homeowners.

According to a survey by the Resolution Foundation, renters are more likely than homeowners to have fallen behind with their housing payments during the lockdown. They have been less likely to receive a payment holiday on their rent, as opposed to those with a mortgage.

The data from the ONS also reveals that spending on activities including holidays and eating out is proportionally lower among renters, potentially limiting their ability to manage housing costs alongside a loss of income.

Franz Doerr, CEO of flatfair, commented: “Today's figures from the Office of National Statistics do not come as a great surprise, but underline the threat that coronavirus poses to the rental market. 

“Renters do not have as much breathing room to cut back on spending, leaving them vulnerable to economic shocks. While it is positive that the government has further extended the moratorium on evictions, they cannot just keep kicking the can down the road. 

“Action needs to be taken to support tenants and landlords alike to communicate, and ensure that a fair and equitable solution is found in the unfortunate cases where a tenant cannot pay their rent.”

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    Absolute rubbish - Spending on holidays and eating out is virtually zero for homeowners and renters because both business sectors have been closed down. Watch the high streets as they open today and tell me they are only homeowners shopping

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    You may agree or disagree - but please don't use phrases like 'absolute rubbish'. Concentrate on the argument, make the case, put forward your view - but don't resort to dismissive phrases like that. It's called respecting others' views, even if they're different from yours. It's called good manners.

     
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    I’m sorry David W I didn’t mean to cause offence. Maybe the phrase ‘total nonsense’ is better suited. Anyway I’m sorry I need to calm down don’t i

     
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    Jahan is using ONS statistics. I won't repeat the expletive but I am sure it is right. Their proclamations are rarely correct in property matters. They do not understand all the complex interplay of market forces. We have a witches' brew of taxes, interest rates, inflation, compound interest, letting agent law and all the rest of it. Being generous, few people do but a national office! If they did know what they are doing they would be hammering politicians and councils very hard.

     
  • Mark Wilson

    It's self evident, of course low paid tenants are in financial trouble, Mr Kahn, do you not know this? I said months ago rents will drop 25% and the number of transactions will halve for agents. I would be surprised if i am wrong. I am I will admit it!

    To avoid the rhetoric, I am not ant Landlord, it's just a tricky sector to speculate in these days, especially if you have borrowed a lot, you are exposed. Your customer (your tenants) are going to have a rough time for some time, regardless of what you think of them. They will eat before they pay.

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    Well get ready to admit that you are wrong. Rents are up!! They could have been let out 20 X over. Low paid tenants are in trouble? We are all in trouble Tenants, Homeowners, business owners . The moment furlough stops and businesses go under then we will see. Agent transactions may well drop but that is due to gov interference on tenant fees ban. Some LL's will try to cut corners. I've got mainly excellent tenants. They all paid!! I shall reward that loyalty as best as I can as its renewed my vigour in fighting the systems put in place by self serving bodies. I said to the ones trying it on in March eat first then pay your rent then your decision who you pay after that. Food & a roof over your head Mark both very important.

     
    James B

    We have 400 properties in our care, 15 tenants having some difficult and most in hand with agreements
    Rents rising and demand through the roof .. not sure where you get those figures from but in the market it’s the opposite

     
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    "According to a survey by the Resolution Foundation, renters are more likely than homeowners to have fallen behind with their housing payments during the lockdown." Surprise, surprise. Because they probably don't have so much money in hand to start with - otherwise they've have become homeowners. Is this from the Ministry of the Bleeding Obvious? Who are the 'Resolution Foundation' (who it states came up with this really amazing conclusion)? Has anyone ever heard of them?

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    I suggest that real reason is that home owners plan ahead better and get their priorities right.

    Many tenants only live for today, don't save, buy clothes, cars and holidays they can't afford along with too many costalot coffees and expensive hospitality. In fact the lockdown should have saved many of them a fortune!

     
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    Homeowners are paying a diminishing mortgage on a rising asset. Homeowners are in it for the long haul and their outgoings on the roof over their head are reducing over time.

    Not so for tenants as the cost for them is rising on a regular basis with rents based on current market levels. JK has noted above rents are on the rise. If tenants don't like it they had best get their act together and start savings a lump of income for the deposit. Once they all have a home of their own then they will all stop moaning. This will never happen of course because they live in a 'I want it and I want it NOW' state with the 55" screen and all the trimmings that go with it and expect landlords to do the saving for them by not paying rent.

    The article is a load of codswallop DW so get lost you waster.

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    I agree with you RA Thing is I do empathise with the tenants position but all we are guilty of is supplying a roof for people to live under. I thought maybe we would be lauded for doing good things for people starting out/people that can’t get a mortgage or even people that just live for now & spend it on going out cigarettes beers and holidays

     
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    The ''I'm entitled generation '' , Don't knock them though, it's mugs like them that keep us wealthy.

     
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    You don't use a repayment mortgage for buying BTL. You buy an interest only mortgage because the interest is tax deductible and you can save the capital payback to invest in your business in other ways. That is a better long term deal given a normal economic environment.

     
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    @ Fred, the best way to buy a BTL is to pay cash for it and own it yourself

     
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    I don't think calling your customers, 'Mugs', is really appropriate Andrew. A lot of them have to rent due to the contract nature of their work. I rent to a lot of registrar medics who move from hospital to hospital for instance annually. Others in IT are in a similar boat for example. I certainly don't subscribe to that view and have been letting successfully for 30 years now

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    Fine Ken, our views differ, I still say it's a mug that rents.

     
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