The recent explosion of COVID-19 related cases has put the world on a standstill, as the global tally approaches the 10 million mark. The ripple effects of the virus have caused an unprecedented global recession, and landlords have been on the receiving end of this pandemic.
To better explain this, the Statista Research Department surveyed more than a third of all the current and active residential landlords’ in the UK on their experiences since the beginning of the lockdown. Here are the findings as published in the Statista report.
- 34% of the landlords have incurred losses in rental income
- 3.5% have experienced an increase in void periods since the lockdown
- 6.7% of the landlords are experiencing issues with late rent repayment
- Only 37% of the tenants have been paying rent as usual
In line with these stats, it’s safe to say that nearly 50% of all the residential landlords in the UK are feeling the heat of the COVID-19 shakeup. In this article, we’ll delve deeper into the impacts of coronavirus on landlords.
Demand for Rental Property
Experts will tell you that rental property fetches more returns on investment than any other investment assets, and landlords know it too.
To that end, informed landlords look forward to investing in buy-to-let property and many have been making a killing from investing in rental property…until COVID-19 changed the rules. The pandemic has caused the global demand for rental property to plummet as the government enacts tenancy measures while the lockdowns continue to wreak havoc on people and businesses.
Moreover, financial institutions are reluctant to extend credit due to the current economic shutdown, making it hard for landlords to buy or invest in rental property. But if you’re looking to sell your house fast in London, there are sites, such as https://www.sellhousequickly.co.uk/ that buy houses, and will help you through the process and lift the burden of your shoulder.
Non-Payment of Rent
The COVID-19 crisis has rendered many tenants—residential and commercial, unable to pay rent which has resulted in a huge blow to landlords.
Most commercial leases provide that landlords may terminate the lease upon breaching any of the terms contained in the lease agreement, including failure to pay rent. However, the COVID-19 crisis has created a new twist that is voiding these agreements.
Now governments are enacting laws to prevent the eviction of tenants on the grounds of non-payment of rent. For instance, on March 23, the governments of England announced that tenants who will be unable to pay rent due to COVID-19 will not be evicted.
And not just in England, many governments around the world are taking such initiatives to protect tenants from the adverse effects of COVID-19. Note that such provisions do not grant landlords the right to claim forfeiture or recover rent at the end of the period under consideration.
Health & Safety
As the impacts of COVID-19 escalate and governments continue to enact economic measures to contain the virus, landlords are duty-bound to ensure the necessary health and safety measures are in place.
These measures include implementing new procedures for enforcing social distancing and installing the required sanitation facilities—basins, sinks, baths, sanitizers at the entrance, and other COVID-19 prevention facilities where needed.
Some of these procedures and facilities are costly to implement and failure to comply will attract hefty charges or even subject landlords to the risk of imprisonment.
Know of other impacts of COVID-19 that are negatively affecting landlords? Share with us in the comments section below.