Lettings industry is pulling together to keep afloat until Covid-19 storm passes - David Alexander

As is the way of things, residential letting agencies normally devote some of their time to chasing up tenants in arrears of rent.

Some landlords have had no alternative but to completely write-off rental income already as a result of the coronavirus crisis, says Alexander.

But the world has suddenly turned on its head and what would have seemed inconceivable just two weeks ago has already become the norm. So rather than actively attempting to prevent rent arrears (or at least keep them to a minimum), agencies are now proactively pursuing tenants to make arrangements to either reduce or temporarily halt their rental payments while the coronavirus plays havoc with normal business practices.

Clearly, policies will differ but our strategy is that, in basic terms, all three of us – agencies, landlords and tenancies – share a similar situation and that only by co-operating with one another can we get through this.

So far, touch wood, this is a strategy that appears to be working. You know how some people, usually for their own political motives, like to portray residential landlords as hate figures interested only in screwing as much from their tenants with minimum input for their welfare?

Rent-free accommodation

They should take a look at our company “log book” from the last two weeks. Most landlords have been willing to agree plans for tenants to have a rental “holiday” or make a reduced monthly payment. A few of them (and not all wealthy individuals) have even made their accommodation rent-free for the next two or three months with the tenant not obliged to pay the money back when (hopefully!) “normal” life resumes. Of course, this applies only in circumstances whereby the tenant is self-employed or works in an area which has experienced layoffs and redundancies.

Public sector employees with job and salary security are expected to pay rents as normal although special arrangements are being made for front-line NHS workers battling on our behalf to minimise the effects of the virus. This is being managed by a small team dedicated to ensuring that rental help goes to those who need it most.

Some tenants – whether through genuine ignorance or a bit cheekily – have inferred that the mortgage holidays being offered to landlords by their lenders means they can live rent-free for the duration of this crisis. We’ve had to tell them sorry; just as banks and building societies will expect landlords to pay arrears then so will tenants. In reality, whether current rental shortfalls will ever be fully paid back is something for another day.

Some landlords have had no alternative but to completely write-off rental income already. I refer to those whose properties, particularly HMOs (houses in multiple occupancy), had been let to students, especially those whose main home is in other parts of Great Britain or overseas. There are no conventional leases anymore (i.e. for periods of six months or more) and tenants are allowed to vacate a property by giving just one month’s notice.

Keeping the lifeboat afloat

Not surprisingly most student tenants have upped sticks and left, leaving landlords with rental voids which they had not expected to kick in until the end of June. To add to their concerns it is uncertain whether higher education will resume as normal in September because, if not, there will be no rash of students seeking accommodation in Edinburgh and other university towns during the forthcoming summer months.

As for ourselves, the government’s commitment to meet up to 80 per cent (to a maximum of £2,500 per month) of the cost of salaries is keeping the wolf from the door. Without it we would have had no alternative but to initiate substantial redundancies. Even as things stand most staff are, more or less, on furlough, sales activity has dried up and new lettings are at an absolute minimum.

The three of us - agents, landlords and tenants - are akin to shipwreck survivors, all from different backgrounds but sharing a lifeboat in the middle of the ocean and awaiting rescue. For the moment we are pulling together in an effort to keep the lifeboat afloat; until we are safely ashore everything else can wait.

– David Alexander, MD of DJ Alexander