Tenants downplay impact of Covid-19 on arrears
- Published: Wednesday 03 March, 2021
- By: Commercial Trust
Deposit suppliers Mydeposits and Ome have released a new survey which highlights that Covid-related rent arrears may be affecting less people than previously thought.
The survey, which was open to tenants, landlords and estate agents, was taken by over 14,200 people at the end of 2020 and covers a wide range of issues such as tenant-landlord relationships, rental experiences, and rental arrears.
Cause for concern?
Whilst the media has been focused on the increasing numbers of tenants with arrears due to Covid-19, the survey paints a somewhat different picture.
From the perspective of tenants within the survey, 95% reported that they were not in rent arrears as a result of the pandemic.
This sentiment was not shared by landlords and agents, with over four-times as many saying that the pandemic had directly caused their tenants to accrue rent arrears (31%).
The report points to this divide being caused by:
“A lack of awareness from tenants who are in rent arrears, and/or a lack of communication between all parties regarding rent payments and arrears. Similarly, tenants may also be in arrears for reasons that are unrelated to COVID-19.”
Alongside the questions about arrears, the survey investigated how tenants were feeling regarding landlord flexibility around financial struggles.
One in six confirmed that their landlord had been flexible and accommodating to rent issues (57%), and around a third (31.1%) had been offered a rent reduction of rental holiday from their landlord.
Elsewhere in the report, there is a focus on the relationship between tenants, landlords and agents.
“Despite the often-frosty relationship portrayed in the media between landlords and their tenants, survey responses painted a more positive picture, with tenants rating their relationship with their landlord on average 7.4 out of ten. An approval rating of over 70 per cent.”
“Similarly, agents and landlords were overwhelmingly positive about their relationship with their tenants, 30 per cent rated the relationship a nine out of ten. 29 per cent rated their relationship ten out of ten, with over 88 per cent of respondents choosing seven and above.”
The opinions also differ when the survey was investigating value for money.
“Almost half of tenants (49 per cent) said that they did not feel that renting offered good value for money, with 37 per cent saying if they could afford to, they would purchase a property themselves.”
“Contrastingly, when the same question was posed to landlords and agents, over three quarters said that they believed that renting does offer good value for money (76.39 per cent), attributed to the flexibility it affords renters (13 per cent) and advantage of being absolved of maintenance costs and worries (9.4 per cent).”
With the furlough scheme still being in place, a true picture of the impact of Covid-19 is likely to be somewhat masked.
Given the furlough deadline has again been moved back, the true picture will not be clear until beyond the end of September.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.