Shawbrook Bank

Almost half of private landlords cut tenants' rent in 2020

Some 46% of landlords have reduced monthly rent payments for their tenants because of the pandemic, according to research from Shawbrook Bank.

The bank surveyed 1,000 landlords — including 150 portfolio landlords — and 1,000 private tenants. 

According to the data, 28% of landlords gave their tenants a full rent payment holiday, while 18% offered a rate reduction, for an average time of three and four months, respectively.

Those that gave their tenants a payment holiday estimate that they lost £7,500 on average, while rent reductions cost £6,500.

The majority (59%) of landlords who gave rent reductions did this for more than one of their properties.

Portfolio landlords were more likely to have agreed a rent reduction with their tenants; 17% admitted to missing out on income, compared to 12% of single-property landlords.

When asked about how the agreement came about, more than one-third of landlords said they proactively offered it to their tenant, while a further 45% confirmed it was a mutual decision. 

Concerns around furlough, job security and redundancy were all common reasons why a rent reduction or payment holiday were suggested.  

John Eastgate, managing director of property finance at Shawbrook Bank (pictured above), said: “No amount of foresight could have prepared landlords or tenants for the impact of the pandemic. 

“During this incredibly difficult period, landlords acted pragmatically, recognising the additional strain their tenants were under; in fact, in many cases, landlords were initiating the conversation around cutting rents to ease their financial burden. 

“This period has clearly underlined the critically important role that the private rental sector is playing, and will continue to play, in the UK housing market. 

“There is a strong argument to suggest that landlords in regional locations have never been in a better position to profit, while city centres will continue to represent good value as workers head back to the office, even if it is on a part-time basis.”

Shawbrook’s research is part of a new report which will provide an overarching look at the BTL market, as well as exploring the impact the pandemic has had on both landlords and their tenants and considering what this means for the private rental sector going forward.

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