The lettings market experienced a hugely busy July, with rents up and voids down across the board, as demand for rental properties goes from strength to strength. Average rental costs are now well above the 12-month rolling average, voids are at their lowest level since August 2019. Encouragingly, tenant salaries are also the highest they’ve been in at least two years. We expect this trend to continue for the rest of the summer.
Employers contributing to furloughed employees’ wages as scheme starts to wind down
Last month, we touched on the fact the Coronavirus Job Retention Scheme – also known as the furlough scheme – is beginning its wind-down, with businesses now required to make a contribution to the cost of their furloughed employees wages. From 1 July 2021, the government reduced its contribution to 70% of wages, down from 80%. The level of the employer’s contribution will increase to 20% in August and September, until the scheme ends on 30 September 2021. The end of the scheme could impact some tenants’ wages, with forecasters at the Bank of England, as well as the government’s spending watchdog, the Office for Budget Responsibility, are “expecting a small rise in unemployment after furlough ends”.
We’re still keeping in touch with your tenants to ensure that we’re up to date on their current situation. If you have any questions or concerns, please feel free to get in touch. We offer Rent Protection Insurance, which pays out for up to 15 months’ worth of rent, and it will continue to pay out for 75% rental payments for up to two months after vacant possession. The policy is designed to protect you against the risk of a tenant not paying their rent, breaching their agreement or damaging the property. Get in touch if you would like to learn more.