One in 12 tenants has had their rent reduced to help them beat the cost-of-living crisis.
Buy-to-let investors are haemorrhaging rental income as soaring inflation and rocketing energy bills hammer renters’ finances.
Nearly one in 12 tenants (8pc) said their landlord had given them a temporary rent reduction in the last six months, according to research by Shawbrook Bank, a mortgage lender.
A further 5pc said their landlord had temporarily frozen their rent.
Experts warned that Britain’s soaring rental prices are now hitting a ceiling of affordability as the cost-of-living crisis deepens.
Rental growth in the year to July hit 12.3pc, according to property website Zoopla. In London, rents rose by 18pc.
By contrast, wages fell in real terms by 3pc in June – the steepest drop since records began in 2001, according to the Office for National Statistics.
A severe shortage of properties means landlords have been able to raise rents quickly, but Shawbrook’s research suggested these jumps have become unsustainable.
Emma Cox, of Shawbrook, said: “Arrears are definitely something most lenders are thinking about, it is definitely something that we are thinking about.
“We might have to think about how we can support landlords who are under pressure with their mortgage payments and we have to be thoughtful about our approach to risk.”
If the cost-of-living crisis deepens significantly, banks could tighten their lending criteria for buy-to-let mortgages, Ms Cox said.
“We’re not there yet, but we’re trying to grapple with where the tipping point is, which would mean we would need to adjust our risk profile. At that point, we might reduce our loan-to-value ratios, or spread out the mortgage terms,” she added.
The Centre for Economics and Business Research, a think tank, has forecast that nearly one in 10 tenant households will fall behind on rent this financial year – a total of 407,000 families. This will be a third more than during the pandemic.
Shawbrook’s research was a representative survey of 1,000 landlords and 1,000 tenants.