Rent arrears fear for landlords despite pandemic discounts

Scotland’s largest landlord membership organisation has warned that despite almost half of landlords offering discounts to tenants affected by Covid-19, arrears are continuing to rise and could reach unsustainable levels unless government takes action to help tenants pay their rent.

SAL has published details of a survey of its members which found that in the past four months, 95% of letting agents had lost an average of almost £10,000 due to the pandemic, whilst 66% of landlords had lost an average of almost £5000 each.

The same survey found that 44% of SAL members have provided discounts to tenants, with the most common reduction given being 20% off the monthly rent.

While the Scottish Government has announced their intention to extend the emergency restrictions on evictions due to the impact of coronavirus until March 2021, SAL believes that without government assistance to help tenants pay their rent, arrears will continue to grow, with many landlords and agents simply not able to sustain losses.

SAL is calling on the Scottish Government to use Holyrood’s existing powers to create new social security benefits and change the eligibility criteria for Discretionary Housing Benefit.  This would allow more people to gain assistance with paying their rent, keeping them in a home, reducing pressure on social services and ensuring they can more easily contribute to the economy.

Other key findings from the survey of SAL’s almost 5000 members include:

• 66% of landlords have reported losing income, with an average of almost £5000 each
• 44% of landlord and agent respondents have provided a discount for tenants
• the most common reduction percentage given by those reducing rents was 20%
• 96% of agents responding have had rental properties void as a result of the pandemic.

John Blackwood, chief executive of SAL, said: “What landlords, tenants and the Scottish Government must focus on is how to sustain tenancies. Landlords should continue to be flexible and understanding, reducing rent and writing off arrears where possible for those affected by the pandemic, and tenants should ensure that their landlord is kept informed about changes to allow for reasonable solutions to be found.

“But unless the Scottish Government uses the powers of Holyrood to put money in the pockets of tenants so they can pay their rent, we will find ourselves back here in March 2021 only with a greatly amplified problem and even less flexibility to find a solution that works for everyone, exacerbating the effects of the pandemic and economic downturn.”