Propertymark has warned that the private rented sector (PRS) is heading for a cliff-edge, and has called on the UK government to take action before the situation worsens.
In its representation to the Chancellor’s Autumn Budget and Spending Review 2021, Propertymark argued that – without a support package for tackling COVID-induced tenant debt and a reformed court system – landlords could leave the PRS in greater numbers.
A recent Mortgage Works survey suggested that 20% of landlords are likely to sell property in the next 12 months.
Propertymark cited a combination of moving goal posts, tax implications, tenant debt and a backlog in the courts as reasons smaller portfolio landlords are leaving the market.
The UK government previously stated that for, “most landlords, income from rent makes up 42% of their total gross income, making them highly vulnerable when their tenants build up rent arrears.”
Figures collected by the government showed the proportion of private renters in arrears has tripled during the pandemic, from 3% between April 2019 and March 2020 to 9% during November and December 2020.
Propertymark warned that if the upward trend in this data continues, the number of renters in arears could reach almost 800,000 by the end of 2021.
Mark Hayward, chief policy adviser for Propertymark, said: “We are urging the UK government to look at the bigger picture here.
“It’s not about propping up landlords but more about doing the right thing for the country as we work to build back better from the devastating effects of the pandemic.
“Ultimately the housing system needs to work for everyone, but landlords are being asked to carry too much of the financial burden caused by the pandemic.
“We are risking good landlords leaving the market.
“The private rented sector supports five million households in the UK, and is an important provider of homes against a backdrop of an overwhelmed social housing system.
“However, at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated COVID-related debt is inadequate.”