Open Letter – Should landlords carry the financial burdens of Covid-19?

by Patrick Garratt - 19th January 2021

We have received letters from Nottingham Trent Students’ Union and The Students’ Union at UWE asking for Purple Frog and our landlord clients to refund rents and waive future claims for rent for students tenants due to the latest government lockdown.

It’s a request made by many of our students, so I am publishing both the letters which have been received by us, and our response.

Letter from Nottingham Trent Students’ Union and The Students’ Union at UWE:

Our Response:

“Dear Conor Naughton et al,

 

I’m writing in response to your letter requesting rent rebates for students who are unable to return to their accommodation.

Whilst I fully understand and appreciate that many will choose to follow government guidance, for clarity, students are legally entitled to return to their accommodation; government guidance is that they should not return to university accommodation where possible, until at least mid-February.

I agree that students have not had a great experience this academic year and last. Online learning and having a reduced requirement to use their university accommodation, and not being able to work in the jobs they would have normally to support themselves financially will have meant that their experiences have not been as they should.

That being said, there is unlikely no individual in the world right now who can say that they have had the experiences they should have in the last twelve months. Millions have lost their jobs and are surviving on Universal Credit,  have had reduced income, or are struggling to do their jobs from home and educate their children; and thousands of businesses have collapsed wiping out years of hard work for those who have built their companies from scratch.

I believe your request that private landlords should be the ones to pay for this is misplaced.

Large intuitions like the universities themselves and Unite etc can afford to pay rebates, or offer discounts for all tenants who aren’t using their accommodation at the moment. The financial cost of this will absorbed by their existing assets or divided amongst their many shareholders.

Private landlords are, however, in entirely different financial situations.  The narrative that all landlords are rolling in cash so they should be the ones to take on the financial hardship might be an easy one to tell, but it is not based in reality.

Many of our clients are retired, they have saved throughout their lives and invested in property to create an income in their retirement.

Others are working people who use the rent from their properties to support their income; many of them will have also been furloughed, or made redundant.

Giving up a number of months’ rent from all of their tenants would have a significant financial impact on these individuals who will also have monthly expenses to pay (mortgages, insurance, safety certification) which do not just stop because tenants aren’t there.

In addition, what should I do as a business owner? I still have to make sure the properties we manage are safe and well maintained, whether there are 1 or 6 tenants living in them. We earn fees from rents collected; if we are not collecting any rent; what am I to use to pay my employees?

It is not fair that any individual is financially harmed by the measures implemented by the Government to combat Covid-19, but, transferring that financial harm from one group to another is not the correct solution to the problem.

I strongly believe that it is the job of the Government to support those who have suffered as a result of government policy, not private landlords.

Our clients are of course compassionate people; we have been providing the facility for our tenants to apply for rent payment holidays (https://www.purplefrogproperty.com/payonline/payment-holiday-request/) since the start of the first lockdown and if individual tenants are experiencing significant financial distress we will work with them where possible. Our landlords may be able to help on those occasions; but asking them to give blanket rebates or end tenancies early is not financially possible for most.

Your sincerely,

 

Patrick Garratt

Managing Director
Purple Frog Group”