Small Landlords, Tenants, Lenders, Governments Grapple with “Extend-and-Pretend Forevermore”

Most of the fallout from the Pandemic has been postponed in the UK. But then what?

By Nick Corbishley, for WOLF STREET:

The British public was recently treated to an exemplary example of what Wolf Street likes to call “extend and pretend forevermore.” At the end of last week, the UK government extended its ban on tenant evictions by four extra weeks. First launched in late March, the ban was supposed to last three months, but it was extended by an additional two months in June. Now, it’s been extended til late September.

In other words, tenants will have been safe from legal eviction for six months so far this year. The government also lengthened the minimum period of notice a landlord has to give before evicting a tenant from two months to six months.

Extending the eviction ban and the notice period offers a lifeline of sorts for tenants who are unable to pay their rent in the wake of the lockdown. Their landlords cannot evict them but the rent is still owed. And while extending the ban and the notice period may remove the immediate threat of eviction, in many cases all it really does is postpone the inevitable while shifting the locus of immediate financial stress from the tenants to the property owners. And the property owners are not happy.

“While the announcement could be seen as good news for tenants as it gives them the security of having a home, especially during a time when so many have been affected by the financial impact of the pandemic, it begs the question – what about the landlord?” asks Paul Offley, Compliance Officer at The Guild of Property Professionals.

In some cases, Offley warns, it could take far longer than six months for landlords to complete the eviction process, particularly if the tenant decides to stay on even after the eviction period has lapsed. During the notice period, landlords may no longer qualify for forbearance — or as Brits breezily call it, a mortgage holiday — which is scheduled to come to an end in late October, though it too could be extended. During the six-month period landlords will still be legally bound by Health and Safety regulations pertaining to their property, even if they have no rental income coming in to pay for repairs.

How many landlords are in this situation?

Two million people in the UK — roughly one in 33 people — currently own homes they rent out. The vast majority of them are small buy-to-let landlords with one or two properties. Many have mortgages to service on the properties they own.

For over three decades the UK witnessed a huge buy-to-let boom, as investors and pensioners took advantage of favorable tax conditions to play the property market. After the GFC, as interest rates fell and yields on conservative investment products such as UK gilts gradually disappeared, more and more money flowed into property. Then, three years ago, the government reversed policy amid concerns that buy-to-let landlords were crowding out first time buyers: little by little, the tax conditions became less favorable, prompting many landlords to sell up. The boom ended.

Now, some of those who didn’t sell up face the risk of not being paid by their tenants. According to a poll of 1,058 private renters in England conducted by YouGov for the homeless charity Shelter, the number of renters in arrears has almost doubled since lockdown, from around 226,000 to around 442,000 — over 5% of the country’s 8.7 million renters.

A recent poll by the National Residential Landlords Association (NRLA) suggests the number could be higher: 87% of the landlords surveyed said their private tenants had paid their rent as normal throughout the pandemic so far. An additional 8% said they had agreed a reduced rent, a rent-free period, or made some other agreement with their tenant. The remaining 5% of tenants are behind on their rent without the consent of their landlords. In other words, according to the NLRA, 13% of tenants in the UK are not paying their full rent.

In the UK, like much of Europe, most of the fallout from the Pandemic has been postponed, thanks primarily to the government’s furlough scheme, which has kept 9.6 million jobs on life support. Businesses have been able to claim 80% of a staff member’s regular monthly salary, up to a maximum of £2,500. The money is passed on to the employee and can also be topped up by the employer.

Many furloughed workers have continued to earn the lion’s share of their salary despite the fact they’re not working. This has allowed many of them to continue making their rent payments. But that may not last much longer. The government has already begun scaling back the furlough program’s provisions and is scheduled to scrap it altogether at the end of October. Unlike most of its European counterparts, it says it sees little sense in keeping workers in so-called “unproductive jobs” any longer than strictly necessary.

The government could execute another last minute U-turn, but if it doesn’t — and my guess is that this time it won’t — unemployment will quickly soar, much like it did in the U.S. in the early days of the Pandemic. Businesses that can no longer afford to pay their staff or lay them off will hit the wall. And the real upheaval in the rental market will start, as more tenants stop paying their rent, quite possibly at the same time that their landlords’ mortgage holidays end.

Landlords are edgy. Some are calling for the government to directly bail out renters so that the renters can then bail them out. In Wales, an even more ingenious scheme has been hatched: the government essentially gives struggling private sector tenants that have arrears dating back to the Pandemic a loan so that they can pay their landlords the arrears they owe. The taxpayer funds go directly to the landlords, who are made whole, while the struggling tenants get to take on thousands of pounds of fresh debt.

The plan, scheduled to kick off next week, has already drawn plaudits from landlords and real estate agencies in England, who are clamoring for much of the some across the border.

“A loan system of the type operating in Wales will help to protect tenants by ensuring they can continue to pay rent and reduce the risk of evictions,” said Dorian Gonsalves, chief executive of the residential property lettings agency Belvoir. “In the long term a loan system to subsidize the rental market and protect tenants may ultimately be less costly for the government than a potential increase in homelessness, especially as councils will struggle to rehome people due to a shortage in social housing.”

But before landlords in Wales and England get ahead of themselves, they might want to consider that a very similar scheme was launched four months ago in Spain, where rental delinquencies are a much bigger problem, and it’s been a complete flop. Just 1.3% of tenants have shown an interest in applying for the government-backed loans — a fraction of the estimated 15% of tenants who are no longer paying rent.

In most cases, the reason is simple: having lost their job or business and facing the bleakest economic panorama of their lifetime, tenants are struggling to see the point of taking on piles of fresh debt to pay months of rental arrears when they can’t even rustle up today’s rent. Not everyone, it seems, wants to play the extend and pretend forevermore game. By Nick Corbishley, for WOLF STREET.

Over-65s, a large and growing demographic in Europe, are cutting their spending at worst possible time as NIRP eats into savings, pensions, investments, and annuities. Read... How Negative Interest Rates Sap Consumer Spending by an Ever Larger Part of Consumers

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  70 comments for “Small Landlords, Tenants, Lenders, Governments Grapple with “Extend-and-Pretend Forevermore”

  1. raxadian says:

    Then they either get a at low interest or go bankrupt, maybe even one after the other.

    How does Bankruptcy work in the U.K anyway?

    • Morty Mc Mort says:

      When the Rule of Law Breaks Down.. all of Society Suffers..
      Eventually, no one will invest in Upkeep, Repairs, and New Builds..
      Why are all true Communist/Socialist systems slowly going bankrupt and declining? – It begins with a Just System, and Honest Courts and Enforcement..
      I guarantee.. you will not like the alternatives…

      • Jdog says:

        The problem is that when the free market is interfered with, it causes inequity. The more intervention, the more inequity. This goes on until it causes such a high level of discontent, it erupts in violence and the system collapses. We are growing ever closer to that point.

        • ian says:

          Landlords in the UK are treated like the scum of the earth, whipped on by media and jumped on by the Government to provide a scapegoat for their own failings. As the article says most landlords are small timers who get no yield anywhere else due to next to zero interest rates. They are then labeled scoundrels due to a couple of bad apples. They constantly think of more ways to add cost, we have to get a test for legionnaires disease every year or so, another couple hundred quid down the drain. I have only heard of this disease in NHS hospitals but we have to get houses tested. What’s next, bilharzia in the water tank? Now the landlords are hung out to dry on the covid panicdemic. We do not live in a capitalist country anymore.

      • Lee says:

        IIRC the government here extended the time period for evictions till the end of the year.

        THere is some scheme for reduced rent and a discount on land taxes, but in many cases the reduced rent is more than the reduction in land tax.

        There are also some kind of provisions that you can’t have more than xx dollars in the bank and have to have lost your job.

        Some universities are forking out thousands in grants for to foreign students for rent and other costs, but on teh other hand are cutting hundreds of jobs………………….go figure.

        Of course, when all this bs started here they had so many perverse rules that people were actually FORCED to stay in the rental because a strange part of the law wouldn’t let renters end the lease early!!!

        I think they changed that,but with the currect lock down there wer questions about how people can get new leases as almost all activity related to getting one has been suspended…………………

  2. joe2 says:

    It’s what I have always said about risk – you don’t know you are at risk until you do know. The example I used was a mom and pop corner store where they worry about paying rent, deliveries, theft, cash flow and then are closed down by a zoning change.
    Looking over the 6 recent tax bills received just from the county – the next “no one could have seen it coming” is tax bankruptcies.

  3. 2banana says:

    And the property taxes. And insurance. And utilities. And mortgage.

    Just how do you think this will end?

    “During the six-month period landlords will still be legally bound by Health and Safety regulations pertaining to their property, even if they have no rental income coming in to pay for repairs.”

  4. Paul says:

    I don’t know how anyone pays rent to private landlords in Bristol. I’m lucky I’m in my 50’s and bought a property in my early 20’s just to live in, not invest. If you look at the average wage in Bristol it doesn’t stack up? Rent, Council Tax, utilities add it all up and the sums don’t make sense. Point I’m making is this Ponzi scheme was set to crack way before COVID, COVID was just the pin that pricked the bubble…will be a lot of pain but maybe all these investors will get washed out and a sense of reality might return to the housing market. Given the shift to home working maybe the insane demand in key neighbourhoods will diminish?

  5. MiTurn says:

    Now everyone is a victim!

    20+ years ago I was renting a home when the landlord declared bankruptcy. The lender allowed us to stay in the house for six months, rent free, as the transfer in ownership of the house went through the courts. They didn’t want the house left vacant, nor could they receive our rent, for whatever reason. Worked out great for us.

  6. MonkeyBusiness says:

    After this, no one will ever want to become a small landlord again.

    • joe2 says:

      Damn straight. I sold all properties in 2006. County zoning, handicap, building, zoning, regulations and then taxed like I was supporting all the “sanctuary immigrants” single-handedly.
      Not to mention the tenant damages.
      If you don’t make Section 8 – you will live under a bridge.
      The government will own most rental buildings soon.

      • MiTurn says:

        “The government will own most rental buildings soon.”

        Maybe that’s the plan.

    • Chillbro says:

      That’s great! Less parasitic old people rent seeking, maybe real estate can be affordable for you people again!

  7. A lot of these renters are downwardly mobile? Is there much stiffing the old landlord to pay the new one? The IRS wants to know right up front if you use Bitcoin. The central banks have been laundering money for years, now it’s the little guy’s turn. These landlords assume the government aid will get down to them, just like we all thought QE would trickle down to us. I expect mass evictions, and landlords dropping rents to get some cash flow. Everybody lies and government prints more money to fill in the gaps. Dow100K…

  8. Rajan Sood says:

    Yet there is no let up in the UK residential property market – prices continue to climb.
    Noting there might be some time lag.
    Despite the lock down – auctioneers are running on-line auction supported by virtual property tours.
    And buyers continue to buy at the current price levels in search for yield or to get on the property ladder.
    Whilst the economy daily shows job losses – today Gatwick London second largest airport is letting go of quarter of the workforce.
    There was a bright spot yesterday Tesco UK is biggest grocery retailer is creating several thousand jobs due to boom in on-line shopping. Shoppers to scared to go to the shops!

    • jeremy says:

      Some ‘bright spot’ – thousands of previously well paid employed professionals now picking and packing food at Tesco. This isn’t going to end well.

  9. gorbachev says:

    Many small landlords are young.They don,t have much money

    so they put in a ton of sweat equity.As you get older not much

    energy for sweat equity so you need to pay up.You are forced to

    sell but what to invest in.Hard choices all around.

  10. YuShan says:

    Those poor landlords! Cry me a river!

    I’m a renter and the rent I’m paying comes out of my savings. Hence, my income has been suspended YEARS ago with NIRP! And unlike rent arrears, that interest income is lost forever! Where is my rescue package?

    Seriously, if landlords cannot survive even a few months rent arrears, let them sell some of their property or get a job!

    To be clear: I’m paying my rent (and easily can) but we have to have a serious look into this unbalance of savers/ renters/ taxpayers always having to bail out property owners, speculators and corporations via negative real interest rates, inflation and government debt.

    • RightNYer says:

      Most of the landlords you’re referring to are NOT the beneficiaries of the “bailouts” or “speculation.”

      • Yushan says:

        All landlords are beneficiaries of NIRP through lower mortgage rates and inflating property bubbles. And knowing our government, they will soon be beneficiaries of bailouts.

        • nodecentrepublicansleft says:

          Trust me, if you spent some time as a LL, you’d have your eyes opened wide to the reality of it for the small ones. I’ll give you a real life example.

          I bought a small home in SW Florida 4 years ago for $45K. It had commercial zoning and was in a good location. I had one tenant put over 100 holes in the wall when I was forced to evict him.

          Why did I evict? Because he was running an illegal food truck. I spent months trying to convince him to get permits/insurance and go legitimate. I found out later he wouldn’t go legit because he was $60K in arrears on child-support.

          My neighbors told me when he gone that he had planned to “rip the pipes out of the walls”. I could go on with lots of other similar stories I’ve heard from friends who one a home or two to rent.

          For regular folks who aren’t involved in the stock market or hoarding gold bars, there are a few popular ways to try to get ahead: flipping cars, flipping homes or being a small time LL. My blue collar Uncle did 2 of those 3.

          I understand your anger towards LLs. I have little sympathy for the big corps and people who abuse their tenants. But lots of small time folks became LLs out of necessity, not blind greed.

      • MonkeyBusiness says:

        At the same time, some people have to be benefitting from NIRP and that includes small landlords. They get to refinance at lower rates. Can’t have it both ways.

        • Lisa_Hooker says:

          Try to qualify for a refi with regular job gone and a tenant that hasn’t been paying rent. :-(

    • Jdog says:

      What the hell are you talking about? When have property owners ever gotten bailouts?

    • Lee says:

      Live in a tent – it is cheaper and you won’t be ‘ripped off’ by someone providing a service for you.


      • No Expert says:

        Housing is not a service you can opt out of, as you allude to. More like holding a gun to the tenant, pay or be homeless.

        LL power now apparently extends to blackmailing the state, lovely folk i’m sure.

        “…chief executive of the residential property lettings agency Belvoir. “…subsidize the rental market and protect tenants (lol) … less costly for the government than … homelessness…”

        • Lee says:

          Gee, you people in the USA have some strange ideas about what constitutes rights – right to this, right to tha,t right to have riots and destroy other peoples’ property.

          Right to have free use of another’s property as well.

          There are all sorts of things that you can do for housing including sharing and even moving in with a family member.

          In any event the perverted actions going on in the USA make even other countries look good including the one down south, Mexico.

  11. The Bob who cried Wolf says:

    Not sure what they have in England but here we have the 5th amendment. What the government has done here is as clear of a violation of the 5th that there ever was. They, with the stroke of a pen, said we landlords can’t collect, can’t evict, can’t do jack.
    They need to provide just compensation for private property taken for the public good, the property being our rentals, the public good being subsided housing with me being the subsidizer.
    And any of you out there with the knee jerk response: but they said the tenants will still owe it to you, you’ll get paid. I’ll put this question out to all the landlords on Wolfstreet, have you ever been able to collect from a tenant after they’re a month out? It’s rare, it does happen, but the overwhelming majority of the time they never pay you back.
    Bottom line is that there will be numerous lawsuits against the government for taking our property without compensation.

    • Seneca’s Cliff says:

      You can look at this situation as the lesser of two evils. If you let the jobless tenants be kicked out they camp on the streets and riot against the government and capitalism in general. But if you let them stiff the landlords they (small landlords),might be wiped out but the buildings will still remain and you can get new landlords later. The masters of the universe have decided that the small landlords are the cannon fodder who have to, “take one for the team”

    • Beardawg says:

      The Bob Who Cried Wolf

      I am glad you framed the argument constitutionally. Giving tenants an indefinite rent holiday is indeed a form of inverse condemnation. I am aware how much vitriol there is for Landlords and lenders (I am the latter) but I must echo the comments of RightNYer and others who either are/were real estate investors…or…know those who have chosen real estate as an investment vehicle vs equities, bonds or other investments. It takes decades to achieve your investment goals in real estate and though tenants do not want to hear it, investing in any form involves risk. I have lost a LOT of $$$ as a rental real estate investor over the years due to market fluctuations – I took risks. However, if the gubment nationalizes real estate ownership – it is unconstitutional. The mob mentality of the non-investors (read “tenants”) should not create a constitutional malfunction – whether in the UK or the USA. If it does – God help us.

      • The Bob who cried Wolf says:

        They’ve essentially nationalized our industry. And, yes, you are spot on with the risk; we started buying places back in 2001 and didn’t really start seeing any tangible cash flow until just a few years ago. My wife and I are the quintensential mom-n-pop business owner who started to dabble with owning rentals. When we started our children were small and there were health issues we overcame. It was risky but we took the risk and followed the American Dream narrative. Now they want us to provide free housing for anyone who says they can’t pay. I get it, no one wants to be homeless but that doesn’t take away from the blatant illegal and unconstitutional aspect of the “you don’t have to pay rent” mandates. You don’t see them (gummit types) mandating free food, gas, water, etc from various other providers. They went after us, and with a passion. When landlords begin their lawsuits they (we) will win. It will take time but we will win. This is no different from them taking a building to build a freeway and not paying whoever owned it before they stole it.

        • Lisa_Hooker says:

          Good point. Why hasn’t the government commanded the utilities to provide a moratorium on electricity and gas, the cities on water and sewer?

      • Matt Belben says:

        I think the counter to that would be that just because someone chose real estate as their investment vehicle doesn’t entitle them to absolute protection from the government when their investment impinges on the common good. Private property laws are not absolute. Just look at eminent domain.

        And nothing against small-time landlords necessarily, but I could point out another contradiction here: It makes no sense to claim that the government has no right to interfere with the private wealth you derive from your private real estate investment, without recognizing that it’s government interference that created the majority of that wealth in the first place, by restricting the supply of houses through things like zoning codes. To the extent that real estate investment today amounts to land speculation, landlords cannot be protesting government intervention per se so much as they are protesting the replacement of one market distortion for another.

        • Beardawg says:

          Matt Belben

          Eminent domain is real and it has precedent. If the government is going to effectively condemn someone’s property, they have to pay for it. As Bob Who Cried Wolf and others have pointed out, a permanent policy of “you don’t have to pay rent” is effectively eminent domain or “the taking of property for the public good.” If that happens, the government needs to open up the checkbook and pay the land owner for the land they are taking. The market distortion you reference can be implemented at that time. In short, the government can say that $100,000 piece of property you (Landlord) bought 2 years ago is now only worth $50,000 and that’s what we will pay. They (government, mob rule tenants) can get their revenge on land owners by distorting the market in that way…..and it would be legal…..and lethal to land owners.

    • Just Some Random Guy says:

      According to the MSM all landlords are millionaires and billionaires so they can afford a year or two or 10 without any revenue.

    • Just Some Random Guy says:

      “there will be numerous lawsuits against the government for taking our property without compensation.”

      And judges will laugh at you. Remember in 2009 when GM was bailed out and bond holders were given nothing? Same principle. The federal govt just undid centuries of financial law and precedent on a whim. And nobody said boo. Landlords are 2020’s version of GM’s bond holders.

      • Beardawg says:

        Yes, but bonds are not real property – ownership of property in the USA is (or should be) sacrosanct.

    • Chris says:

      It seems to depend a lot on the state. I owned several NY properties and we often don’t receive January rent payments due to bills related to Christmas but the tenants tend to catch up later in the year. Oddly even 3 months delinquent tenants about half seemed to pay back the amounts over 6 month payment plans.

      Texas tenants tend to just up and leave at random. So you get the property back in the middle of the lease and the tenant gives up the security deposit. I hear Florida is similar I have a friend who owns a lot of properties in Miami and had several tenants leave.

      This cycle I had almost all DC area properties but had no tenants skip at all in the pandemic on 40+ properties. We have had some not renew their leases but property condition has been generally pretty good when they left.

    • Dan says:

      The 5th amendment provides that no-one should be deprived of life, liberty or property *without due process of law*. As long as there has been due process when the law was passed, surely this would mean that it is constitutional?

      • Beardawg says:


        Technically, I guess you are correct. That said, despite the corruption of our mostly useless Fed and State legislators – I think you will find it very hard to get majority votes to take real property away from Americans via inverse condemnation by forcing land owners to provide other citizens their liberty (shelter) with no compensation.

    • Thomas Roberts says:

      The Bob who cried Wolf,

      In my average Midwest city, I know alot of landlords. A 1 bedroom apartment is 600 a month. Most people in my area own their home.

      To answer your question for my area, pre CCP-19, if a tenant ever falls 2 months plus behind, whether they have the money (they usually do or just didn’t want to work) or not, they almost never catch up.

      As for the lockdown, fortunately, for my area it only lasted about 2 months and hasn’t come back and the eviction free period ended at the same time. Many apartment tenants stopped paying, however, because, most were getting 600 a week extra at the time, most actually did pay it back (after lockdown ended, I just found this out), most non payers waited hoping that the eviction free period would be extended to some farther off date, if that had happened or if they weren’t getting the extra 600 a week they wouldn’t have paid it back, it could have sunk some of the landlords. If a longer eviction free period is ever declared especially if it’s 6 months plus, all the small landlords dealing with apartments will be gone. The housing market is doing very well in my area and so those dealing with houses were in a better position during lockdown. Some landlords are considering selling off a few properties (mainly houses), just in case and because of the current high values. I told a few landlords back in January, this kind of stuff could happen and some of them, got a few problem tenants out ahead of time, who definitely wouldn’t have paid it back. Many of the non payers were never any trouble before this, some legitimately couldn’t pay right away, but, most could. Even some of those who couldn’t pay at first, but, later could waited until eviction free period had ended.

  12. Marc 60 says:

    What a brilliant idea just delay the inevitable and make all these people become homeless in the cold of winter instead. What could possibly go wrong with that?

    On a side note I live in NW London and had to go through Hampstead a very up market area of London. I have never seen so may empty and for rent shops in this high street before that used to be hard to get and demanded premiums to get one. Many of the shops that are still closed can be seen emptying the shop of stock and fittings indicating they are not coming back to me. 2021 is going to prove to be very interesting for all IMHO.

  13. Just Some Random Guy says:

    You have to have rocks in your head to be a landlord right now.

    • Wolf Richter says:

      Just Some Random Guy — and other landlords here:

      Question: In some of your prior posts, if I remember correctly, you said you had a rental property or rental properties. Are your tenants falling behind with their rent?

      A friend of mine who has several apartment buildings told me that they now have a lot of vacancies but no problem with missed rents. I look at industry data from large landlords across the US (apartment buildings), and missed rents are just 2 percentage points higher than they were last year.

      Some of the internet surveys say that 30% or whatever of the tenants haven’t paid their rents. But I’m not seeing this in the actual data.

      I’m trying to see how much these missed-rent-payments are really a problem. I would love for our landlords to chime in here.

      • Mr. House says:

        Lots of uhauls at the end of july and lots of mattresses left for the garbage. I suspect that the city witnessed an exodus of unessential service industry workers who just moved back in with ma and pa.

      • Beardawg says:


        I am now a lender (seller-carry back loans on rental homes owed by investors), so I can speak to mortgage payments made by my investor / borrowers – none have missed any payments. I do have 3 direct tenants and none have missed rent payments.

      • A drink before the war says:

        Small landlord here in North Carolina . I am currently down to only holding 6 properties, 5 that I manage myself and another managed by a rental company. Everyone is current and up to date. The 5 I manage have tenants that all have been in place for at least 3 years. I try hard to screen for good tenants and I try to manage my little company in manner that isn’t always focused on just the economics. That’s not always easy, and I have been taken advantage of by a renter or two, but my renter turnover rates has always been low, which I value.

      • The Bob who cried Wolf says:

        We got stuck with unpaid late fees and had to take a major hit on keeping their deposit for damages done as well as not charging for the overage on damages. We did this to keep from having to deal with a lawsuit for asking a tenant to leave for not signing a lease. They held the “you can’t evict me” rope around my neck and used this to not have to sign a lease so went month to month while they house hunted; and they flaunted it in telling me that there was nothing I could legally do. I personally know a few folks who aren’t paying their landlords and are very behind. Fortunately, we’ve got very good tenants overall (across 16 front doors), but that one cost us a lot (several thousand) and we’ll never see that lost income again. Now we’re being super picky, as are most landlords, which will make it very difficult for marginal tenants to find a good place. Thank you gummit, you actually screwed everyone.
        The landlords getting screwed aren’t going to care much whether they’re in a large percentage or small, they’re getting screwed and will go belly up and that’s all that’s important to them right now.

  14. TimTim says:


    Politically the UK media will have little support for ‘faceless’ landlords.

    Simple political reality. The victim narrative will win.

    Now, that is step one.

    Step two is a slow financial train crash for both landlords and tenants.

    Step three is some landlords will hand the keys to the bank. Some will stick it out.

    Step four is a significant number of tenants will not find enough to make good accrued debt and so just leave, declare bankruptcy, whatever.

    And if you are still with me, Step Five:

    When there are enough homeless, the media will clammer for unoccupied homes to be requisitioned by the state as ‘temporary’ accomodation.

    Step six, requisitioning occurs at government mandated rates for a government mandated period of time.

    If people have any rental properties by step five, hmm, what will they be payed? If you decide to sell, who will want to risk buying?

    Pie in the sky from the perspective of today, but there was a lot of property requisitioned in WW2 by the UK government that was never given back after the war. Precedent is there.

    • Whatsthepoint says:

      True about requisitioning…my husband’s parents lived in a flat on Cheyne Walk by the river that was requisitioned by the Council after the war…I know someone else whose parents did the same…too bad they didn’t stay on for right to buy….?

      • Stephen C. says:

        Curious to know more about this requisitioning during/after the war. Were the owners of property recompensed at all? Were only veterans allowed to move in?

        • Whatsthepoint says:

          He’s not sure…it seems any property that was vacant and unclaimed – as many may have died in the war or otherwise – was used for social housing. There was a lot of new construction on bomb sites. You can tell the difference by the architecture.

    • YuShan says:

      Most MPs are landlords themselves, so the landlords will get bailed out one way or another.

  15. LouisDeLaSmart says:

    There is no good answer here, someone has to lose. I think the banks had a nice ride. How about they pay the bill this time and not the tax payer?

  16. Dan says:

    Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains — all the while the landlord sits still. Every one of those improvements is affected by the labour and cost of other people and the taxpayers. To not one of these improvements does the land monopolist contribute, and yet, by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived…The unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.
    — Winston Churchill, 1909

  17. Ralph says:

    At the end of time, the first people into the Lake of Fire will be the landlords. The lowest of the low. They make a slum out of my country

  18. john says:

    Sweden has shown beautifully that lockdowns are useless. That’s the model that the whole world should follow.
    To save lives and the economy.

    • Wolf Richter says:


      Swedes locked down voluntarily, after deaths spiked, because they didn’t want to die. Working from home, near-zero flights, people stopped going out, stopped traveling…. As a result, Sweden’s GDP in Q2 plunged 8.6% (US GDP plunged 9.6% with a lower death rate).

      That said, I agree, lockdowns as practiced in many places are too harsh. But masks when in public, social distancing, working from home when possible, and avoiding or closing mass-spreader events (crowded bars, sports events, etc.) should do the trick if everyone follows it.

      • Willy Winky says:

        Forbes (April article during the height of the infection surge in Sweden):

        Topline: Sweden is taking a more liberal strategy to combat coronavirus than its European neighbors.

        Unlike the rest of the continent, people in Sweden as of Friday were still permitted to visit restaurants for sit-down meals, get a haircut and even send children under the age of 16 to school.

        It’s all part of Sweden’s plan that focuses on self-responsibility as the government turns its attention to isolating and treating confirmed coronavirus patients, instead of widespread shelter-in-place orders.

        Sweden’s Chief Epidemiologist Anders Tegnell has expressed skepticism about enforcing a sustained period of lockdown.

        While bans have been placed on gatherings of 50 or more people and Swedes have been told to avoid unnecessary travel, these are relatively laidback restrictions when compared to other European countries that are shutting down schools and restricting everyday movement.

        The government instead has emphasized a set of guidelines, like encouraging increased hand washing, social distancing and limiting contact with vulnerable people, like those over age 70.

        Recent numbers show Swedes appear to be following social distancing guidelines even when they’re not required by law. Passenger numbers on public transportation in the capital have fallen by half, and polls indicate that half of residents there are working from home.

        Perhaps they read the BBG article and followed Michael Burry’s recommendations?

  19. Ghassan says:

    Multi property Landlord own their property because the tenants have been paying their mortgage & taxes & expenses. Most landlord would not be able to have any houses if it wasn’t for the tenants. Should be very happy they made a fortune even if occasionally a disaster hits so maybe they are not getting paid sometimes. Because remember you got here on the back of the tenants anyways.

    Before any LL starts punching me, I’m a landlord myself (but I paid cash) so…

    • YuShan says:

      Landlords with a mortgage in our NIRP era is a very strange thing anyway. Their mortgage is subsidised by savers who are not receiving any interest on their savings, which are a necessity to even pay for a deposit to buy a house themselves. In the mean time 2.5% CPI inflation and 10% house price inflation. This entrenches the wealth divide that most agree is undesirable.

      I don’t blame the landlords, they just do what is in their best interest. But this system is rigged, everybody knows it, but nobody does anything against it.

      Let’s start with raising overnight interest rates to at least the level of inflation (anything below that is basically confiscation of savings to subsidise debtors, i.e. the rich, who own mortgaged real assets). Then we let the market determine the longer term interest rates without central bank interference (i.e. rates rise when demand for credit increases – this would prevent all bubbles).

      It’s weird that free unrigged markets is such a radical idea nowadays.

      • Jon W says:

        I agree. I don’t blame them, but I think they are naive if they don’t see the pain coming. That house prices have continue to rise during a massive recession with large numbers of job losses already is just ridiculous. The govt should have allowed a mild correctly and propped things up if it got too bad. Instead they preemptively cut stamp duty and mortgage rates, and lo and behold, prices bounced.

        Those not on the property ponzi were already pretty angry, now they are incandescent, as the rug has been pulled again.

        This is going to have political ramifications, and with young folks piling up on wrong side of the door in increasing numbers, it’s pretty obvious what is going to happen.

        • YuShan says:

          Cutting stampduty at this moment was the most stupid idea ever. In a red-hot housing market, it was always obvious that the “saved” stampduty would simply raise the prices by the same amount. And that is exactly what happend. It is once again a subsidy to the group that already owns.

          Young folks are angry, but unfortunately, they are directing their anger in the wrong direction. Rioting about statues or facemasks instead of the class divide and economic hopelessness.

          One would almost think that elites have planned all this deliberately as a divide and conquer strategy: stir-up identity politics and let the plebs fight each other instead of their suppressors.

        • Stephen C says:

          I’m guessing the excerpt quoted below (from a comment above) is from a British person, and therefore in the tone of polite understatement, or . . . he/she/it/they, or whatever pronoun they prefer, forgot the sarc tag!

          “One would almost think that elites have planned all this deliberately as a divide and conquer strategy: stir-up identity politics and let the plebs fight each other instead of their suppressors.”
          Even deeper than with race, we have been divided into tenants, small landlords, and savers. If these groups could ever come to a meeting of minds, to see clearly how we’ve all been screwed by the same distortions that come down on us from above, things could change. We don’t have to be enemies. We could overcome the deep conditioning we’ve all grown up with, the conditioning that says we must be pitted against one another.

          These forms of identity run very deep. We see ourselves as exclusively Tenants, Small Landlords, Savers. But don’t we all need one another? Must we be enemies? What if we all got woke to the scam at once and demanded that the price of money be found in a free market? That would make the mighty tremble!

      • Ghassan says:

        YuShan, I don’t blame landlords for being landlords either, just saying stop bitching about non paying tenants (which are small %) because these are the same tenants who paid your mortgage until this point and without them you wouldn’t own your property in the first place.

  20. YuShan says:

    Oops! This was a comment to Jon W, not to Ghassan.

Comments are closed.