The Power of Kindness in Letting Relationships12 May 2021
The news that rent arrears are mounting is making headlines, as it hits circa 840,000 tenants in England and Wales since the first lockdown. What is surprising is that so little was done to avoid this crisis when there was still time to prevent it.
The Rent Happily approach to No Rent Arrears
In April 2020, it became obvious that a huge deficit in income would build up for landlords who didn’t act on it, and we urged them to negotiate with their lenders, to talk to their tenants, and to face the crisis together. All of our portfolio landlords took our recommendations in, and we nipped the problem in the bud.
Over the last year, we’ve seen it all, from landlords losing their jobs to tenants being furloughed, landlords entering the market or leaving it, but our balance sheet is clean: there has been not a single month of rent arrears, not one late rent that was not previously agreed upon, and we have lost no tenants over the period.
The building up of rent arrears
The lack of action in the sector at the onset of the crisis has created what seems to be a societal issue. Yet it is only a private concern between tenants and landlords, and there is no mediation or breathing space that will change that: tenants owe money to landlords and that’s the end of it.
This situation is also creating an enormous backlog in courts, and landlords are facing up to a 12 months wait before possession orders are granted! This is the natural consequence of the rent arrears, and it was one further reason to avoid this in the first place.
Socialism for the rich and capitalism for the poor, again
This situation certainly benefits no one, as landlords will lose money and tenants will lose financial credibility. Solutions were available, rent arrears were negotiable, and this crisis was avoidable altogether, but the lack of common sense of the interested parties created a vicious situation, and either tenants will bear the brunt and suffer long-lasting consequences, or the taxpayer will foot the bill, privatising profits and socializing losses at a massive scale as is usually done in similar situations.
The reward of Kindness
The landlords who embraced the difficulties with their tenants showed empathy under circumstances where no one was to blame and they showed courage, believing a little effort would somehow help to solve a crisis they had no control over. Some landlords gave rent holidays, rent rebates or both to their tenants, and in every single case, the landlord’s gesture has been received as a gift by their tenants, who then went out of their way to honour what they perceived as generosity, kindness, and care. After this, rent payments were made on time, delayed payments were quickly honoured, and rent arrears were avoided throughout.
It has been a privilege to witness in real life the results of such acts of humanity, and we can say with confidence that it creates a win-win situation between tenants and landlords, where both enjoy the security and reassurance of a mutually beneficial relationship.