Around 77% of brokers surveyed believe that lending, mortgages in particular, will stabilise and recover to pre-pandemic levels within 9 months. Half of those surveyed (51%) believe it will happen inside of 6 months, research by Smart Money People has shown.

Smart Money People’s managing director, Michael Fotis, commented “Tentative steps are being taken to get the economy moving, and many lenders are talking loudly about their appetite to lend.

“That said, with job security likely to be a concern for many consumers, and predictions that house prices may decline by up to 13%, it’s really hard to see customer appetite for new mortgage lending returning until 2021 at the earliest.”

Equity release brokers proved to be sceptical of a recovery with only 19% feeling that lending will return to normal levels within 6 months.

So what does this mean for investors and landlords? Perhaps the days of worrying whether you can refinance or get that pesky deal over the line, could soon be over. And as the government flood the market with liquidity following the Covid-19 financial aid measures, maybe we could even see a spike in housing market activity, from sophisticated and ‘newbie’ investors alike.

Housing and Communities Secretary, Robert Jenrick, during an online Q&A session with MPs on the Parliamentary Select Committee announced that the effective ban on evictions in the private rental sector may be extended by 3 months.

This comes as a blow to landlords with problem tenants, as well as neighbours next door to dysfunctional HMOs and properties with antisocial behaviour issues.

This won’t come as a shock to most landlords, as part of the government’s assault on the private rental sector. With the abolition of Section 21, changes to Section 8, growth of Article 4 dictations and the changes to tax legislation make this yet another ‘below the belt’ hit to landlords who currently operate. The government has already forced landlords to keep tenants that can’t pay in their properties.

We cannot discount the tenants who are genuinely struggling to pay due to the effects of the pandemic, for example those who have lost their job as a result. What the extension doesn’t account for are those who were due to be evicted pre-pandemic, already thousands of pounds in arrears who were granted evictions that were simply badly timed.

The semantics used also introduced a level of confusion. Many tenants automatically stop paying because they believe their landlord has a mortgage ‘holiday’, when in actual fact this is not a holiday, but a deferral of the payments – they still have to be paid. Many tenants see this as an opportunity not to pay, as well as wrongly thinking those rental payments have been ‘written off’ and not payable, largely thanks to the government.

Compounding the issue is the fact that landlords (many of whom are working professionals, not millionaires) are receiving no assistance from the government directly. This discounts aid such as Business Bounce Back and CBILs loans, which are reserved for sophisticated landlords, who need less help than the average landlord, who isn’t classified as self-employed by HMRC. Many aren’t eligible for any help via the Universal Credit system, either.

This is seen by many as a cynical move by an otherwise ‘finger-pointing’ government. Many landlords are already looking to pull out of the private rented sector and opt for shorter-term lets such as holiday-lets or serviced accommodation. As this trend increases, so will homelessness, as private landlords form the majority of the rental stock in the UK; which can only lead to further homelessness down the line.

The government can only punish landlords for so long.

Today, the Bank of England has warned that the current pandemic, brought on by Covid-19, will bring about the biggest recession on record. It speculated the economy as a whole will shrink by 14% in 2020 (if lockdown measures are relaxed sometime in June).

Research by the Bank of England shows the economic impact by Covid-19 had been “dramatically reducing jobs and incomes in the UK” during the period.

The policymakers voted to keep interest rates at their record low of 0.1%. There was some disparity between the Monetary Policy Committee (MPC) on whether to increase stimulus into the economy. A total of 22% of the committee voted to increase the latest round of quantitative easing to £300bn.

The Bank of England’s analysis was based on the lockdown measures being phased out gradually from June onwards. Its latest Monetary Policy Report illustrated that the UK economy would enter its first real recession in more than a decade. It shows the economy shrinking by more than 3% in the first 3 months of 2020, with a much sharper decrease in the months from June.

This would cause a recession in the UK due to two consecutive quarters of economic decline.

The Bank commented on the housing market, saying it had effectively come to a standstill. In addition, all consumer spending had dropped by 30% this month.

For the whole year of 2020, the economy is expected to shrink by over 14%. This would be the largest decline on record, according to the Office of National Statistics (ONS).

The economy isn’t expected to return to pre-pandemic conditions until at least the middle of 2021. Governor of the Bank of England, Andrew Bailey, expects any ‘permanent economic damage’ caused by the virus to be relatively minimal. He said the economy was “likely to recover much more rapidly than the pull back from the global financial crisis”.