The drop in incomes will hit just as tenants see energy bills rise by 120pc this year to reach an expected average of £2,800 by October, in the wake of the energy price crisis and the war in Ukraine.
Jamie Moodie, 65, has a portfolio of around 20 properties across the UK. “I have already had a couple of late payments and I have had tenants leave properties because they can’t afford them,” he said.
Rising energy bills will hit tenants hard, he added. The energy bills on his HMO properties (large shared houses, where the landlord typically covers utilities) have jumped from £300 to £550 per month. “That is extortionate, and I know that that will be affecting all of my tenants on single lets too. This will be very serious for them.
“One couple called me yesterday to say that they would be paying late. They both had reasonable jobs. They are in a better position than most. If they are finding it hard, others will find it absolutely crushing,” Mr Moodie said.
“All of these problems will eventually come knocking at our door and landlords will suddenly find we have all of this rent not paid,” he added.
Neal Hudson of BuiltPlace residential analysts said: “If things do get really tough, some tenants might find it easier not to pay their rent than not to pay other bills.” This is because landlords are not able to immediately seize properties from tenants who miss payments.
A record 1.9 million renters rely on housing benefit. “More than half of them are paying more in rent than their housing benefit will cover,” said Mr Wilson Craw.
Polly Neate of the housing charity Shelter criticised the Government for continuing to freeze housing benefit despite record rent rises. “Families will be facing impossible choices between keeping food in the fridge and keeping a roof over their heads,” she said.
The new pressure on rental income will hit landlords just as they must pay as much as £10,000 per property to cover energy efficiency upgrades. “My wife and I are talking about selling all of our properties over the next two years. Enough is enough and we can only get kicked so many times,” Mr Moodie added.
