In response to the COVID-19 outbreak, the government has created emergency legislation, advice, and guidance to support the housing market. But what does this mean for the lettings market? With the many updates and changes, it can be difficult to pinpoint what changes and support affect you as a landlord. To cut through the noise, we have put together the latest Government measures to help you navigate the market during this difficult time.
No new evictions
If a tenant is struggling to pay their rent due to the impact of Coronavirus, the government has brought in emergency legislation that includes a ban on any new eviction in both the private and social rented sector. It is hoped that this will take the pressure of millions of tenants up and down the country who may be unfit to work or may have sadly lost their jobs due to the impact that Coronavirus had has across the nation. The legislation states that new proceedings to evict tenants will not be able to begin for at least a three-month period. After this, it is advised that landlords and tenants develop their own rent repayment plans that consider the tenants individual circumstances. The Government asks that landlords show compassion to their tenants during this time and allow them to stay in their homes where possible.
Rent Holiday
As a private Landlord you may be concerned that Tenants stop paying their rent and you lose an income you are relying on. At Greenstone we have had a handful of tenants request payment holidays already, and although it is currently a very small percentage of our managed portfolio we are still in uncharted territory and expect more requests.
We have devised the following plan as a minimum that a Landlord should offer, however, some landlords feel that they want to help tenants further and are offering reductions over 50 % and temporary three month reductions that do not need to be paid back in the future.
The tenant(s) should initially provide evidence of their redundancy/pay cut. Upon confirmation, the tenant(s) should propose a percentage of the monthly rent not less than 50%, to which they can commit to paying for a period of 3 months. At the end of the 3 month period, we will review the situation with them and either revert back to the full rent payment, or make adjustments where necessary. Any rent that goes unpaid will continue to accrue and must be paid by the tenants, whether before or after their tenancy expires depending on what arrangement has been made, normally without interest.
Landlord and Tenants will sign an Addendum to the Tenancy drafted by Greenstone with any agreements made.
Three-month mortgage payment holiday
In line with the ban of new evictions, the Government has introduced a three-month mortgage payment holiday for buy-to-let landlords, and homeowners struggling for funds to pay their mortgage. Obtaining a mortgage payment holiday requires you to contact your lender, who will consider your circumstances on an individual basis, so it is important that you are open and transparent about your situation as soon as possible. You should continue to pay your mortgage until you have reached an agreement with your lender. The housing secretary, Robert Jenrick MP, said “The government is clear. No renter who has lost their income due to coronavirus will be forced out of their home, nor will any landlord be facing unmanageable debts”. So as long as you contact your lender in good time, this should take a lot of pressure off landlords and homeowners.
What about unmortgaged rental property?
For landlords with a portfolio of homes that they own outright and offer for rent, there are currently no measures in place [as of 25/03/2020].
Recording tenants who are self-isolating
If a tenant in your property is currently self-isolating due to exposure to symptoms of COVID-19, or they themselves are experiencing symptoms, you should record this along with all conversations that you have with the tenant. If you have an upcoming visit to the property scheduled, such as a property maintenance or inspection visit, you should not put your staff or contractors at risk. You should cancel the visit until the tenant is over the illness and no longer has to self-isolate. Your record of communication with the tenant should evidence that you took reasonable steps to show that you intended to visit the property and that you used advice from Public Health England to prevent the spread of COVID-19 by rearranging the visit.
