Landlords Asked To Reduce Rents By University & Student Union

 Attendees at last weeks HMO Governance Board hosted by Portsmouth City Council have been asked to share an open letter with local landlords and agents asking them to reduce student rents as has been done in student halls.

Read on for details of their request, our response and some useful statistics collated by the NRLA

What Was Requested?

You can see the open letter here:    https://pdpla.com/useful-documents-list/312-upsu-and-uop-rent-relief-student-accommodation

The thrust of the letter leaving out all the verbiage is:

- Students are being disproportionately affected by lockdown through having to pay rent for properties they cannot even travel to, live in and still pay for, through no fault of their own

- we are writing to ask you to support students and join the University, Unite, Collegiate and The Student Housing Company to offer fair rent relief to students.

What Was Our Response?

We said:

We were saddened to see your open letter to private landlords and its assumption that we, as a community, have done nothing yet to help our tenants during the pandemic.

Considering that unlike most businesses and universities, landlords have had no help at all from the government and, as many local landlords are dependent on the income from their properties, we continue to be pleasantly surprised at the lengths some of our members have gone to in the aid of their tenants.

Having said that, when a tenant loses their job or has their business shutdown and is facing bankruptcy, it is no surprise that local landlords go the extra mile and reduce rents, allow contracts to be ended prematurely or come to other arrangements to help their otherwise homeless tenants.

Some facts for you to consider:

• Landlords rent properties as a business. This year, that business has not been good – outgoings are increased due to the higher utility bills of homeworking yet in many cases we have accepted a lower income in order to help our tenants
• According to NRLA research, only 14.6% of landlords said their lettings business has been unaffected by the impact of the coronavirus.
• 20.1% have received a request for a rent reduction and this has been granted in 61.1% of cases
• 19.4% have received a request to terminate a tenancy and 30% have been granted
• 12.5% have received a request for a rent holiday and 39.4% have been granted
• And 7.1% have had tenancies abandoned without a request (remember, a tenancy is a legal contract and I am sure your Law School would not approve any actions which encourage a breach of said contract)
• Interim findings from a recent survey of private landlords by the NRLA found that 56% had lost rental income as a result of the pandemic, with 12% having lost more than 20% of that income. Of all those who had lost rental income, 22% had lost more than £5,000, with 36% saying the losses are continuing to increase
• Where students have not returned, it is rare that a whole household has not returned. Many of our members have half full houses which incur all of the same costs as if they were fully occupied
• We have had no help from government. Some talk about mortgage holidays – a 'mortgage holiday' is simply a deferral of debt and during the time of deferral, that debt increases – so a landlord with a 10-year £100,000 mortgage will typically be paying £250 per month in interest charges. If he takes a 6-month payment holiday, his payments will go up to £255 and he will have to pay back for 6 months longer – so in this example a 'payment holiday' will cost the landlord an extra £600 over the remainder of the mortgage period and that will be passed to tenants in the form of increased rent, after all, that is how businesses work. Is that what you really want?
• By comparison, the typical student still has all of the grants and loans they would have had, had there not been a pandemic. Are they being declined or paid back as the expenses they were designed to cover are not being incurred?
• It is interesting you ask us to take a hit to our income when universities seem to have had little impact on their own. They are still charging full tuition fees on top of which the government has made £280M available to support UKRI and the Dept of BEIS is distributing grants and low interest loans to guarantee 80% of lost income from international students plus with the higher education regime announced by the DoE the government will bail out any institutions at risk of bankruptcy due to the pandemic. For comparison, we landlords, would love to have any support of any form.

So, our guidance to our members remains unchanged: "if you have tenants who are struggling due to the pandemic, please do whatever you can to help them through this difficult period. It is always better to keep a good tenant and give them time to pay off arrears than it is to evict them and incur the costs of replacing them." We do not advocate blanket reductions, but have found that in cases where reductions have been made, most are significant rather than the token gestures we are seeing with student halls at present.

With all of this in mind, please can I ask you to recognise the important role of local landlords and avoid actions which demonise us as a community.

Useful Research From The NRLA

We used facts and figures from the following NRLA produced resources:

National Lockdown Impact:https://pdpla.com/useful-documents-list/313-national-lockdown-impact-on-rented-housing

Rent Arrears Statistics: https://pdpla.com/useful-documents-list/314-rent-arrears-dynata-research

APPG input:https://pdpla.com/useful-documents-list/315-2021-01-19-appg-for-students-inquiry-nrla-submission