What long-term impact will coronavirus have on the private rental sector? We asked 8 experts to find out

The implications of the coronavirus are far from clear. But it’s likely that it will have a long-term impact on the private rental sector (PRS).

We want to help you to navigate the current uncertainty with as much confidence as possible, so we reached out to a range of experts to get their take on what the long-term implications of coronavirus might be.

From the rise of virtual landlording to how to manage disputes, here’s what our experts had to say about the long-term outlook for private rental landlords.

 

Claims of a pending ‘eviction crisis’ are probably overblown – Ben Beadle

Ben Beadle is the Chief Executive of the largest trade body for landlords in the UK, the National Residential Landlords Association (NRLA). He believes that most landlords and their tenants have done a good job at working together to get through this situation.

“The COVID-19 pandemic has been an unprecedented event, and landlords have had to play their part in supporting tenants through it. We have seen landlords adapt, offering rent deferrals and reductions where they can and changing their business models, offering virtual viewings for example, to help tenants find the homes they need. Despite the easing of lockdown there is no doubt that there are challenging times ahead.”

“It is inevitable there will be a backlog of repossession cases when the courts reopen following a five-month pause – we would like to see the justice system think creatively about how best to progress cases. This needs to include prioritising the most urgent cases such as those related to anti-social behaviour and existing cases that were prevented from advancing due to lockdown, causing further hardship.”

– Ben Beadle, Chief Executive of NRLA

“For all the scaremongering, our most recent research shows there is no ‘eviction crisis’ looming. Nine out of 10 tenants have been continuing to pay their rent. Where arrears do need to be paid back, communication is key. Talk to your tenant and use mediation services if needed, as any court action is likely to take a very long time.” 

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A lot of smaller landlords may exit the market - Paul Shamplina

Landlord Action founder Paul Shamplina believes COVID and its aftermath may make the market a less friendly place for small landlords. 

“These are tough times for landlords. I’m getting contacted personally on social media by at least five landlords a day.

Previously, it would take you normally five months to get through the court system. Now it’s longer than that. We have landlords with over a year’s rent arrears so that’s tough.

“In the residential sector the market we’ve seen most affected is the student market where you have tenants who are refusing to pay because the universities have shut down and that could be the case for another year. 

“I think in the future we’ll see a lot of tenants wanting to do direct three and five year tenancies or leases with councils. I think that will happen a lot. Because of course landlords will be worried about tenants’ employment status going forward.”

“85 or 90 per cent of the market is landlords with one or two properties. And it’s harder and harder for small landlords. You will also see landlords who are struggling themselves because they’ve been furloughed or their business has slowed.

So I think you will see landlords exiting for a lot of different reasons including recent events, the tax changes and the banning of Section 21. That said, the market might come down which could also present investment opportunities as well for some people.”

– Paul Shamplina, Founder of Landlord Action

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This crisis may dispel some of the stigma that surrounds renting – Matt Hooker

Matt Hooker, Co-Founder of Ome, Hamilton Fraser’s deposit replacement scheme, felt that the coronavirus crisis might shift the public’s views on renting. 

“I think we’re starting to dispel the negative stigma around renting. We’re starting to see it as a positive and, for some, a preferred option.  I think we’ll continue on this path and will start to reflect the rental economies of places like Germany.”

He also anticipates a change in the types of properties that tenants will want to rent.

“Before you’d see a lot of interest in flats close to the buzzy urban centres, but I think you’ll see more households opting for greener spaces as a result of lockdown. Those who rent will be able to move more quickly due to the more transient nature of renting, whereas owners have to take more steps to make those changes.”

Matt recently launched Ome, Hamilton Fraser’s deposit replacement scheme, and says that the scheme has seen a lot of interest from tenants who are keen to manage their cashflow during these uncertain times.

“Lots of landlords and tenants are starting to realise that locking up what is essentially another month’s rent is unnecessary when an otherwise good tenant could use it to see them through the tricky situation we find ourselves in.”

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Virtual valuations will increase in popularity - Will Molland

Will Molland is Director at Rebuild Cost Assessment. He saw a sharp rise in the number of requests for virtual rebuild valuations, which he thinks will continue to be popular after lockdown ends.

“During the strict lockdown period, requests from private rental property owners for our remote rebuild valuations more than doubled.

No doubt this was because of safety concerns, with site visits being impossible at the time, but despite lockdown being eased interest in our desktop assessments has continued.”

“COVID-19 appears to have quickened the shift to remote valuations by showing they’re not only safer, but also quicker, easier, greener and far more affordable when it comes to making sure properties are insured for the right amount.”

– Will Molland, Director at Rebuild Cost Assessment