Policymaking in times of crisis is not a walk in the park, especially when thousands of individuals and families may be negatively impacted by rash decisions and knee-jerk reactions. Despite the onset of the novel coronavirus pandemic and its immediate consequences on the housing sector, our approach is to avoid jumping to hasty conclusions and rely, on the other hand, on evidence-based policy.

It was this spirit of prudence and empiricism that inspired the Housing Authority to commission a scientific survey carried out with a sizeable sample of landlords and tenants which aimed at tackling the quantitative segment within a wider exercise of ongoing market research. This survey was done in parallel to a separate qualitative study executed through dozens of interviews with NGOs and community representatives from all walks of life.

The study was made possible by the mandatory registration procedure ushered in through the Private Residential Leases Act, since prior to 2020 the state had little to no visibility on this market and we can now make use of this data in the public interest.

The results of the survey are fascinating and provide an important snapshot of the rental market during the first phase of the COVID-19 pandemic. The study was carried out with a sample of 415 tenants and 365 landlords respectively and the interviews cover the period between April 13 and 25.

When analysing the cohort of tenant respondents, the first noteworthy finding was that foreigners working in Malta made up almost half of the interviewed sample. What also immediately caught my eye was the strong sense of solidarity and partnership shown by both parties, with approximately 75 per cent of tenants who asked their landlords for assistance due to financial constraints caused by COVID-19 stating that their landlord accepted their request for help.

Another encouraging result of this survey was the fact that most of the tenants who are currently benefitting from

the recently expanded and strengthened Private Rent Housing Benefit Scheme are satisfied with the assistance granted by the state and believe that the application process was both easy and efficient.

In the very first few days of the public health emergency, the Private Rent Housing Benefit Scheme was extended to individuals who had lost their employment, were on forced leave, were working reduced hours or were self-employed individuals at zero income due to the outbreak of COVID-19.

75 per cent of tenants who asked for assistance due to COVID-19 said their landlord accepted their request for help- Roderick Galdes

This subsidy was also extended to victims of domestic violence and individuals who had contracted the disease and has helped tens of families meet their rental obligations over this period in time and, consequently, has also ensured that landlords were receiving just compensation for their investment in the rental market despite the unprecedented circumstances.

The matter of utility bills has also been a controversial topic over the past few weeks and since the Housing Authority has always considered water and electricity expenses to be an integral part of the total housing costs whenever it gauges the affordability of habitation on our islands, it included specific questions on the matter in this survey.

 I am pleased to note that 76 per cent of tenants interviewed told us that they do not find difficulty in coping with their utility bills and this goes to show that the previous administration’s efforts to reduce these expenses is bearing fruit and providing peace of mind to residents.

On the other hand, our survey with landlords produced similar reassuring results, with 74 per cent of the interviewed landlords, who form part of the cohort of property owners who have experienced some form of financial impact on their rental investments, stating that they voluntarily reduced their rents to assist their tenants facing economic distress. Over a quarter of these landlords also described how they’ve lowered their rents by more than half, with a significant number of landlords (around eight per cent) going as far as allowing their tenants to live in the premises free of charge.

Seventy per cent of the landlords who are currently assisting their tenants told us that they’re willing to keep this assistance going until things return to normal, and this sentiment is also shared by the cohort of landlords who fortunately have not witnessed an impact on their rental investment, with 60 per cent of these unaffected landlords telling us that if need be they will also help their tenants make ends meet for an indefinite period.  

Trust in the private residential lease market is still strong, with the study showing that abrupt terminations of lease agreements are still rare despite the uncertainty (less than 16 per cent of landlords reported an untimely end to the contractual relationship) and, in most cases, these came after amicable mutual agreements which were duly recorded by the Housing Authority in its capacity as regulator and registrar following the recent rent law reform. Eighty per cent of interviewed landlords told us that they would still be interested in investing in the rental market once we are freed from the spectre of the coronavirus pandemic.

Despite the positive findings listed and described above, we shall remain watchful and cautious since the situation is evolving day by day and the aftershock of this first phase of partial lockdown may still be felt in the coming weeks and months. However, it is clear that the government is doing its part and fulfilling its duty to care and we are grateful that private citizens, both landlords and tenants, are also pitching in to keep everyone safe and indoors.

The spirit of collaboration between the parties shatters previous misconceptions which painted a picture of the private rented sector as an antagonistic arena. Instead, we have witnessed a situation wherein the parties act as mature partners in an equitable transaction.

This fully respects the ministry’s vision for the rental market. Now, more than ever before, we have understood that housing is not just a commodity but an essential requirement for all to live in good health and prosperity.

Roderick Galdes is Minister for Social Accommodation.