The Lettings Market
The Lettings Market – Despite the pandemic, the rental market has managed to stay afloat. Government assistance and mortgage provisions have allowed people to remain in their homes. However, many of these provisions will soon be ending. The government and the banks are bringing their support to a close as life resumes post-pandemic. However, with the support running out, it could be the start of difficult times for renters and landlords alike.
Furlough Scheme Ending
The government has already begun to phase out the furlough scheme. But, it will be coming to a complete end soon. What will happen at that point is a bit of an unknown. While some workers maybe return to their jobs, others may find their jobs are no longer around. Some people may also be in the position of reassessing their work options.
A possible outcome of this is that many renters may no longer have a reliable income. This could result in them falling behind on their rent. If they are already behind, then this could make a difficult situation untenable.
However, there are many reports of staff shortages as well, so hopefully, many people will be able to find secure employment quickly. However, even in the best case, there are likely to be some people who are in financial difficulty for some time.
No More Mortgage Deferrals
Landlords who have been taking advantage of mortgage deferrals may find themselves having to make payments again. Depending on the terms of their deferral, these payments could be a lot bigger than they used to be.
This financial pressure on landlords is going to have a knock-on effect on renters. Landlords may not be able to be as lenient with late payments and arrears as they would want to be.
Rent Arrears and Evictions
The Lettings Market, depending on the situation, a large number of renters may be about to fall into arrears on their rental payments. But, of course, some renters are already in arrears, and with protections running out, evictions may be forthcoming.
Currently, the number of renters who are in arrears is relatively low. However, if this is due to the landlord taking advantage of mortgage deferrals, the number could skyrocket quickly. If that is the case, many evictions could begin within the next few months as financial pressures start to build.
If even 10% of the renters currently in arrears are evicted, that would be more than double the number of properties available for rent. Such a glut of properties suddenly appearing on the market is bound to affect rental prices.
Bracing For The Storm
The Lettings Market, there is no easy solution to the problem. It might be advisable to speak to your renters to assess the situation. Communication can help to ease the situation and may lead to solutions. However, if it comes to evictions, then be aware that finding new tenants may not be as easy as it has been recently. Demand for rental properties may be dropping just as the supply goes up.
If you need support with putting your properties on the rental market, Assessment Hive is here to help with our property assessment services. Speak to the team today to find out more.