Less than ten per cent of renters confronted with a loss of income during COVID-19 were granted relief with an adequate discount, a report has found, despite landlords having the option of deferring mortgage repayments.
Advocacy group Better Renting found renters who were out of pocket due to the pandemic were given a “satisfactory” discount when they asked only in nine per cent of cases.
The group released their findings today in the report, Rent due: renting and stress during COVID19, after conducting a survey of 967 people and interviewing 52 of them over the phone.
“Most renters have no leverage in negotiating a rent reduction and are entirely dependent on the benevolence of their lessor,” the report found.
“Some renters began negotiations for a rent reduction only to be thwarted by an alienating process.”
Real estate agents take a percentage of paid rent, the report noted, creating “a disincentive to facilitate rent reductions”.
Everyone is feeling the pain, investor group says
The findings of the survey were disputed by the Property Investment Professionals of Australia (PIPA), an advocacy group championing property investors.
They cited findings from their own survey of 1877 landlords, and said 45 per cent of them provided “rental relief to tenants who had suffered a loss of income from COVID-19”.
PIPA did not clarify if this relief was in the form of discounted rent or a deferral.
They said 36 per cent of the landlords surveyed “were also suffering financial stress due to their own loss of employment or reduction of work hours”.
The big four banks and other financial institutions offered to defer home loan repayments for both property investors and owner-occupiers affected financially by the COVID-19 pandemic.
These ‘mortgage holidays’, however, could add thousands of dollars to the life of the loans due to compounding interest.
Clearing deferred rent is “entirely unrealistic”
Better Renting’s report, which was peppered with the first hand accounts of frustrated renters trying to secure some financial reprieve, said three-out-of-five renters (63 per cent) lost some income due to COVID-19, and that one in two (50 per cent) of them asked for a reduction.
“However, the majority of these renters received an underwhelming outcome,” the report found.
“About half received no reduction, or a trivial amount, and about one in five was offered a rent deferral.”
Renters granted a rent deferral would still have to repay the amount owing in full, only at a later date, and this contributed to a culture of deprivation, anxiety and stress, the report said.
“We asked for a rent reduction but we were given a temporary three month reduction of less than 20 per cent,” an unnamed renter in Victoria answered in Better Renting’s survey.
“(It) had to be immediately repaid in the fourth month.”
But for most renters, the report said, clearing their deferred rental debt “was entirely unrealistic”.
And securing either a discount or deferral was an arduous process.
“Agents or landlords would take weeks to reply, would have to be followed up, and would demand private information and reams of documentation,” the report found.
“Renters would be asked if they had accessed their super, what they had in savings, or what other expenses they had cut back. Weeks later they might be told to provide more information, or that they had filled out the wrong form.
“It’s no surprise that many gave up.”
The government’s JobKeeper stimulus payment “was critical in keeping renters secure”, the report found, particularly in cases where a discount on rent wasn’t granted.
“The expansion of JobSeeker was an overwhelming positive in this time,” it said. “On the old JobSeeker rate, it would have been an immense challenge to keep paying rent.”
The supplement is expected to taper down from its current level of $550 to $250 a fortnight in September.
Better Renting is recommending the $550 supplement be maintained. The advocacy group also called for the abolition of unfair evictions and an investment in social housing.