“Pay what you can.” That was the response of one landlord to his tenants in the days following the coronavirus lockdown, as requests rolled in for rent reductions of up to 50 per cent.
In messages and phone calls, tenants related how their income had dried up, with business put in cold storage, and jobs furloughed or cut.
With a small portfolio of buy-to-let properties spread across north London, the long-term landlord-investor, who did not wish to be named, told the FT he sympathised with his tenants who had all been reliable payers in the past.
“You have to be fair with people and let them get back on their feet,” he says, acknowledging that he is fortunate in not being heavily leveraged or dependent on their rents to sustain him.
However, not all of the UK’s estimated 2.6m buy-to-let landlords can afford to be as magnanimous. After a sustained tax and regulatory squeeze on the sector from successive chancellors, the hit to income combined with an uncertain outlook for rental growth and property prices could prompt some smaller landlords to sell up.
Landlords with cash to invest nonetheless believe investment opportunities could yet emerge, with jittery market sentiment limiting competition from other buyers and even pushing up demand for rental property.