Will UK landlords look to sell property due to financial impact of Covid-19?
One in five (21%) landlords plan on selling property as the financial impact of Covid-19 continues to take its toll, a new report reveals.
The study from Simply Business reveals how landlords are still dealing with the financial impact of the pandemic – with over half (51%) losing out on rental income due to Covid-19.
The financial impact on landlords
The survey of 560 UK landlords showed that well over two fifths (47%) of landlords have already lost between £2,001 and £10,0000 as a result of the pandemic.
With almost a third (27%) of tenants left unable to pay their rent, a quarter (25%) of landlords have been forced to turn to their savings to make up for the shortfall in income.
Nearly one in three (29%) landlords say it will take them 6 months to 2 years to recoup the rental losses made during the pandemic, and – worryingly – nearly one in 10 (8%) landlords say they’re still struggling to find suitable tenants for empty properties.
Few landlords looking to grow their portfolio
With the majority of landlords suffering financially in the last 18 months, it’s no surprise that only 8% of landlords say they’ve purchased property since the start of the pandemic.
Yet as the UK continues to emerge from Covid-19, just 7% of landlords plan on buying property in the coming months – with 56% believing that property prices will get higher as a result of the pandemic.
Meanwhile, nearly a quarter (23%) of landlords are put off buying as a result of concerns about the future of the rental market, while 35% of landlords fear further regulation.
Landlords remain resilient
Despite the challenges of the last 18 months, almost a third (31%) say they remain positive about their future as a landlord.
At the same time, 59% still believe letting property is a worthwhile investment – a positive sign for the market’s long-term prospects.
Alan Thomas, UK CEO at Simply Business, comments: “The impact of the pandemic has been felt across all corners of the country – and that’s no different for the 2.6m landlords who let out residential properties in the UK. The extent of that impact is made clear in our latest research, with many landlords losing out on thousands of pounds in rental income.
“So it comes as no surprise that a fifth of landlords are planning to sell property as a direct result of Covid-19. Contributing over £16 billion annually in pre-tax spending, an exodus of smaller landlords from the buy-to-let market could have a devastating impact on the UK economy. But more than this, landlords are crucial to our communities, offering much-needed accomodation to over 4.4 million households.
“Thankfully, for the most part landlords remain resilient – 59% of landlords still think property is a worthwhile investment, while almost a third are optimistic about their future letting property.
“Insuring over 300,000 landlords has given us a unique insight into the impact of Covid-19 on this audience. And now more than ever – as the UK looks to recover from the effects of the pandemic – it’s vital that we recognise their significant contribution to the economy, and the important role they play in providing safe and affordable housing in our towns and cities.”