Older private landlords could see their pension hammered, while pension funds might be less keen to invest in new rental housing if more tenants heed calls for a widespread rent strike.
As renters’ unions whip up support for payment breaks and Labour party leader Keir Starmer faces pressure to back a strike, residential consultant Ringley warns this would punish hundreds of thousands of pensioners as well as risk halting investment by UK pension funds which are ploughing billions into creating new homes.
More than 4,000 Labour party members recently signed an open letter backing rent cancellation as a policy. It argued that Labour’s five-point plan to help renters, which includes extending the evictions ban by at least six months and giving tenants two years to pay back rent arrears, doesn’t not go far enough.
Ringley says that at least 500,000 landlords are retired while nearly half of them invest in rental property to supplement their pension, which means any move to cancel rents without reimbursing landlords would see their rental income wiped out entirely.
Group MD Mary-Anne Bowring says cancelling rents is not the answer. “It would represent one of the biggest raids on people’s pension pots in British history,” she explains.
“Hundreds of thousands of retired landlords who rely on income from rental properties would be left massively out of pocket while landlords planning to use the income to supplement their pension will also be hit.”
She adds: “Rent cancellation would be another blow to UK pension funds who are investing billions into creating high quality purpose-built rental homes, as many will be exposed to shopping centres and other commercial property where rent collection rates have fallen dramatically.”
At least 3,693 people have joined the London Renters Union’s Can’t Pay Won’t Pay campaign which encourages tenants in the capital to withhold rent and prevent and resist evictions.