Financial support for landlords & tenants affected by Covid-19

Financial support for landlords & tenants affected by Covid-19

How the Government and Vision are helping landlords…

Following on from my previous bulletin which set out the compliance issues landlords need to be aware of during the Covid-19 pandemic (including the new Minimum Energy Efficiency Standards (MEES), temporary changes to Right to Rent checks and how to deal with property maintenance, gas and electrical checks), this follow up summarises the financial support available to protect landlords where tenants are affected by coronavirus.

The Government recently brought the Coronavirus Act 2020 into force. This Act implements a number of temporary changes to the way the private rented sector operates and includes restricting the ability of landlords to repossess their property for the duration of the emergency and ensures buy-to-let lenders offer landlords mortgage holidays.

Buy-to-let mortgage holiday

To ensure that landlords can temporarily absorb rent arrears if tenants lose their job or have a reduced income due to Covid-19, the Government has agreed with lenders that buy-to-let landlords will be able to claim up to three months ‘mortgage holiday’ in situations where their rental income has been impacted by the coronavirus.

Landlords apply directly with their lender or broker and this holiday is on the understanding that landlords offer a similar rent holiday to their tenants. Landlords and tenants should be aware that this is just a holiday – payments will still be due, they are just deferred.

Tenants & rent payments

The Government hasn’t introduced any changes to the fact that tenants should pay rent, despite lobbying by tenant support groups that all rent payments should be suspended during the pandemic. Landlords should therefore take some comfort from this and also with Government advice for everyone to stay home, tenants shouldn’t be serving notice, so properties should not become vacant at a time when it will be difficult to re-let due to social distancing measures impacting viewings and move-ins.

If tenants are affected financially by Covid-19 then landlords are being encouraged to work with tenants to offer rent holidays and payment plans, and avoid serving notice where possible.

For properties we manage for our landlord clients, we have been contacted by some tenants that have come into difficulty. In these situations we’re working with landlords and tenants to:

  • understand exactly what the situation is (has the tenant lost their job, had a cut in income, been furloughed or are they self-isolating)
  • establish how much of the rent can still be paid
  • put together rent payment plans
  • advise tenants to contact utility suppliers and the council tax department to discuss suspending payments
  • advise on other financial support that may be available to tenants, for example; Universal Credit, interest free overdrafts and repayment freezes on credit cards, personal loans and store cards

Every situation is different so we are approaching each on a case-by-case basis. Being understanding of a tenant’s situation, showing empathy, communicating regularly and working with them through this difficult period, I am pleased to report has already yielded success in managing arrears for our clients.

Further support coming for landlords?

The National Residential Landlords Association (NRLA) and The Association of Residential Letting Agents (ARLA) are calling for the Government to go further to protect landlords. Other proposals being put forward are to offer interest free loans to landlords and making sure tenants’ income is as uninterrupted as possible, so they are able to pay their rent on time. As part of this ARLA have a campaign running to #keeptherentflowing and are urging landlords and agents to support this.

Further measures to protect tenants’ income have yet to be announced but this is definitely an area we’ll be keeping an eye on, together with everything else across the industry.

We’ll continue to keep you up to date as things develop, but in the meantime we hope you and your families are keeping well and safe.

If you would like to contact us we’re available via all of the usual channels – phone, email and social media.

Nathan Hemming