A housing market analyst is warning of "one heck of a dark cloud on the horizon for the lettings market” as the government’s furlough scheme winds down next month.
Doug Shephard, director of the property website Home and the man behind one of the industry’s leading monthly market indices, makes the warning in his August snapshot of the rental sector’s performance.
He writes: “According to Polly Neate, chief executive of Shelter, which estimates 445,000 private renters are currently in arrears, ‘We could be facing a wave of evictions and homelessness in the coming months unless the government steps in to provide a package of support for people facing COVID arrears'."
Shephard continues: “The current level of supply of available properties to let is low at around 40,000 per month. If only 10 per cent of those currently in arrears (according to Shelter’s estimate) were evicted in a given month, that would mean another 44,500 new lettings units on the market, more than doubling current supply. That’s one heck of a dark cloud on the horizon for the lettings market and a potential wave of homelessness misery to boot.”
Currently the tapered furlough scheme is supporting 1.9m workers, of which an estimated 687,000 are renting privately.
Shephard asks: “So how will those 687,000 tenants pay their rent if they have no jobs to go back to? Some will, of course, return to work and others may well be fortunate enough to find new posts, but the likelihood is that many will not find gainful employment and be unable to pay the rent. What happens then is anyone’s guess.”
He suggests that at the root of the problem is a relative lack of lettings stock in most locations of Britain outside parts of London.
He cites a recent Paragon Bank survey which suggests that rent arrears are currently low - indeed, the lowest for a decade - but he then cautions that some landlords may be taking advantage of deferred mortgage payments offered by some lenders. As with furlough, these are likely to be winding down in the coming weeks.
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This is nothing compared the dark cloud of EPC C hanging over the PRS which is going to see LLs leaving the PRS in droves :(
So the arrears 'estimates' have largely been discredited of late with the low number of court cases going through. Also, not sure how well they know the sector when they are talking about properties in arrears returning to market a month later. End of furlough is definitely a concern but can we steer clear of the scaremongering using estimates and assumptions generated to support a particular narrative and stick to verified, legitimate statistics? I've seen other reports showing arrears are currently at an all time low.
Don't be alarmed or fooled... as usual this is just everyday anti-landlord and anti-PRS propaganda aimed at softening up our useless, timid, feckless government ("Labour in Tory Clothing" I call them) into steadily introducing yet more and more ill considered and unnecessary measures to pander to the hoards of typically young, ill-informed and self-interested left wing voters the Tories always hope to woo as well as wow.
There are of course *real* clouds hanging over the Private Rental Sector, a particularly dark one being Polly Neate herself and her her well funded, incredibly well ingratiated (which is not a typo but exactly what I mean) hard-left political lobbying organisation masquerading as an important and much needed charity....
As I say; please don't be fooled or alarmed but as usual look right through it to see what's behind.
Strange how Polly Neate never connects the endless anti landlord policies (they campaign for) with the shortage of supply
James B, that would require commonsense not to menton logic. Polly Bleate has neither.
What a load of rubbish. If these people can't return to work or find another job then the taxpayer will pick up the tab in the form of UC.
Unfortunately the Conservative government is peddling Communisn.
And this on a day when it was on the news that there are a record amount of job vacancies? More drivel from Shelter the charity (business) that houses no one.
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