Forty-six per cent of landlords have reduced monthly rent payments for their tenants because of the COVID-19 pandemic, according to a new study from Shawbrook Bank.

Research found that 28% of landlords gave their tenants a full rent payment holiday, for a period of up to three months where tenants were not liable to pay any rent. Another 18% offered a rent reduction, for a period where tenants paid a lower level of rent as agreed with their landlord. 

On average, rental payment holidays lasted for three months, compared to rent reductions which lasted four months. Shawbrook’s study also found that the landlords who gave their tenants a payment holiday estimate they lost £7,500 on average, in comparison to rent holidays which cost landlords £6,500 on average.

Shawbrook surveyed 1,000 landlords, including 150 portfolio landlords, and 1,000 private tenants on their property portfolio and rental situation respectively.

When asked about how the agreement had come about, more than a third of landlords who gave a form of rent reduction said that they had “proactively offered it to their tenant”, while a further 45% said it was a mutual decision. Concerns around furlough, job security and redundancy were all common reasons why a rent reduction or payment holiday were suggested, according to the findings.

“No amount of foresight could have prepared landlords, or tenants, for the impact of the pandemic,” commented Shawbrook managing director of property finance, John Eastgate.

“This period has clearly underlined the critically important role that the private rental sector is playing, and will continue to play, in the UK housing market. Responsible landlords have shown their reliability during a crisis, understanding the changing needs of their tenants and acting quickly.

“Solid fundamentals will underpin the market going forward, landlords and investors should look to a positive future. There is a strong argument to suggest that landlords in regional locations have never been in a better position to profit, while city centres will continue to represent good value as workers head back to the office, even if it is on a part-time basis.”

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