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Removal of wage supports will cause spike in rent arrears, SCSI says

The removal or reduction of pandemic-related wage supports could result in a spike in rental arrears, the Society for Chartered Surveyors (SCSI) has warned.

The property industry body said the rental sector had, up to now, been shielded from the worst of the Covid-19 crisis by income and rental supports put in place by Government.

In a survey of estate agents, it found that eight per cent of tenants failed to pay their monthly rent as a result of the pandemic.

However, as these supports are removed “and as the full economic impact is revealed, it is likely that the figures for rent arrears will grow”, it said, noting that young professionals and students were the most vulnerable.

While the 2008 financial crash fostered a legacy of mortgage arrears, there is concern that the current crisis, which has adversely affected low and middle-income earners in the service sector, could result in a build-up of debt in the rental sector.

In a special report on the residential property sector here, the SCSI found little impact on property sales and rental activity from the pandemic.

It said some 56 per cent of estate agents had reported an increase or similar numbers of appraisals (instructions to market property for sale) compared to pre-Covid-19 levels since the reopening of the property sector on June 8th.

A similarly high proportion of agents reported that inquiries from prospective purchasers and property viewings had increased or were comparable to pre-Covid-19 numbers. The strong numbers were linked to “pent-up demand” within the sector.

The SCSI said two-thirds of agents reported that property values remained unchanged when compared to pre-Covid-19 time, with 28 per cent reporting that property values had declined.

Source:

www.breakingnews.ie

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