Coronavirus damage to rental sector could hit £15 billion - claim

New research suggests the damage to the private rental sector in terms of non-payment of rent could be a remarkable £15 billion.

A study by the deposit replacement scheme Ome shows that landlords could be out of pocket by £14.9bn should tenants be unable to pay rent during the three month support period announced by the government last week.

Some landlords will benefit from a three month mortgage holiday but they will still have to pay the three months when it is ‘shifted’ to the end of their mortgage term.

Ome’s research shows that there are 5.2m households currently within the private rental sector alone and without the ability to work and pay their rent, the buy to let sector could see a loss of £4.97 billion every month based on the average monthly rent of £955 alone.

Over three months this climbs to £14.9 billion.

Nationally, this lost income is highest in England with potentially £11.6 billion lost in rental income, while London is home to the biggest sum regionally with a potential £4.9 billion lost in three months alone.

There are some 2.6m landlords operating within the UK buy to let sector with each typically having two rental properties. 

With an average rent of £955 and a loss of three months’ rental revenue across both properties, they could be facing an individual £5,730 shortfall in rental income.

With a ratio of 2.1 properties per landlord in Scotland, the loss is at its greatest at £6,146 over three months with Northern Ireland also high at £6,083.

Not only does this sum have implications on a sector that has already seen its financial return stretched by the government, but Ome says it could see tenants out of pocket even further should landlords look to keep their tenancy deposit to account for lost rental income.