The effect the pandemic is having on Landlords directly, and indirectly, is clear to see.

With the arrival of Covid-19 a substantial section of the UK population has found themselves in increasing debt with limited or no income, and the Financial Conduct Authority has said that 1 in 4 adults have been left financially vulnerable.

How does this affect rental payments?

A recent report from the Resolution Foundation finds over 750,000 families are currently in arrears with their housing payments, and over half of these are likely to have fallen behind as a direct result of Covid-19.

The report states that 6% of those renting in the private sector were behind with their rent payment, whilst that figure is 9% in the social rented sector, and 2% of mortgaged homeowners.

It claims that 24% of private renters have seen their earnings fall during the Covid-19 crisis, compared to 16% of working age adults with a mortgage.

There are other considerations too.

In addition to the issues that landlords are facing with tenants not being able to pay their rent, and the ban on evictions which has been extended until the end of March 2021, Buy to Let Landlords are now bracing themselves for another tax hike when Chancellor Rishi Sunak looks to increase capital gains tax (CGT) which is felt more likely to take place in the Autumn.

A report commissioned by the government is currently suggesting a doubling of Capital Gains Tax on profits from the sale of second homes including buy to lets. The Office for Tax Simplification, set up by the government, says £14 billion could be raised by cutting exemptions and doubling rates, according to the review set up by Chancellor Rishi Sunak.

A new survey by Barrows and Forrester agency finds that while 57% of landlords plan to stick with their investment whatever happens, almost a quarter – 23% are taking a wait and see approach. 13% are considering selling, while some 8% are actually in the process of selling.

This could also have a negative effect on tenants, if Landlords decide to sell up and get out, as fewer landlords will mean fewer properties, and even less-affordable rents.

It’s not all doom and gloom though. 

Hamptons report an average UK rent rise of 4.3% to £1056 over the past 12 months.  And new Buy to Let companies set up in 2020 rose by a quarter to 41,700.

Zoopla’s Rental market report shows that, across the UK, demand for rental property is still rising, with total demand from renters in January some 21% higher than the same month last year.

Demand in some towns across the country is putting particular upwards pressure on rents, with rental growth of more than 7% seen during 2020 in Rochdale (+8.2%), Hastings (+8.0%) and Mansfield (+7.1%)

And void periods are reduced.  Across the country it is taking an average of 30% less time to let out a house than in Q4 2019, while the time to let a flat has remained largely unchanged, taking just 2% less time.

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