Coronavirus news: Emergency measures to keep private renters in their homes
Following the announcement on Monday of mortgage payment holidays for homeowners suffering financially as a result of the current health crisis, last night the Government rolled out an unprecedented package of measures to provide help to protect landlords and tenants in both the private rental sector and social housing sector. Emergency legislation will be taken forward as an urgent priority to prevent landlords from starting proceedings to evict tenants for at least a three-month period.
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This will provide tenants with greater security at a time when they would otherwise have been vulnerable to eviction if they weren’t able to pay their rent for eight weeks or more.
The key elements of the package unveiled are around emergency legislation to suspend new evictions from social or private rented accommodation while the current national emergency is taking place, and will be implemented within days.
This will mean that no new landlord possession proceedings through the courts can be started during the crisis.
In other words, if tenants are unable to pay their mortgage due to financial difficulties as a result of the current pandemic, they will not be faced with the usual eviction process normally enforced if a tenant falls into rent arrears.
In addition, landlords with buy to let mortgages whose tenants are experiencing financial difficulties due to Covid-19 will also be able to apply for a three-month mortgage payment holiday, which can then be passed on to tenants in order to facilitate rents being deferred.
This will also alleviate financial pressure on landlords themselves, who may potentially have to service mortgages on both their buy to let properties if their tenants are unable to pay and have to cover the mortgage on their own home at the same time.
At the last estimate, of the five million or so buy to let properties in the UK private rental sector, as many as half have some form of buy to let borrowing outstanding.
However, at the end of the current crisis, the government anticipates that landlords and tenants will work together to agree an affordable repayment plan on any rent holidays taken.
This is important, as it clearly spells out to tenants that any rent payments which are deferred will have to be repaid at a later date, albeit that this will have to be agreed with their landlord, taking into account tenants’ individual circumstances.
In an historic move, the Government will also issue guidance that asks landlords to show compassion and to allow tenants who are affected by the crisis to remain in their homes wherever possible. Housing Secretary Robert Jenrick MP said of the measures announced today, “The Government is clear; no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”
“These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage. Which is why we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.”
Mr Jenrick continued, “These changes will protect all renters and private landlords, ensuring everyone gets the support they need at this very difficult time.”
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David Cox, Chief Executive of ARLA Propertymark supported the move, saying that “We are very conscious of the plight of tenants in these difficult times, and appreciate any Government action to help those affected by the current situation.”
Henry Jordan, Nationwide’s Director of Mortgages also observed, “As the UK’s second largest buy to let mortgage provider we feel it is important to extend protection to landlords and their tenants during this uncertain period.
“We have extended mortgage payment holidays to include rental properties so that landlords with tenants who are unable to meet rental payments because of coronavirus are protected as much as possible.”
Offering advice for tenants who may already be experiencing difficulties paying their rent, Mr Jordan added, “We would encourage tenants to speak to their landlords if they are impacted or worried about coronavirus to ensure that steps can be taken to support them at this time.”
Although further details on exactly how and when this legislation will be implemented and the process involved for both tenants and landlords remain at this point unclear, today’s events are a historic move by any UK Government to preserve the rights of tenants while at the same time, providing buy to let investors with the support they need to ensure that they are
If you’re facing financial difficulties due to the Covid-19 outbreak, either as a result of losing your job or due to illness and think that you may struggle to make your next rent payment, tell your landlord or letting agent as soon as possible before the payment is due. Do this in writing (email is fine). Keep copies of all written communication should you need in the future.
You may be required to provide evidence of financial hardship, for example notice of redundancy or a doctor’s note; make sure you have this available. Give copies to your landlord or letting agent and keep the originals in a safe place.
Remember, any rental payment holidays are just that – you will have to repay the rent that you owe at some point in the future, although how and when you repay it will be for you and your landlord to agree between yourselves. Make sure you follow up any verbal conversations with an email or letter confirming what’s been agreed and keep copies in case you need to reference them at a later date.
Speak to your lender as soon as your tenant advises you or your letting agent that they may not be able to make the next rental payment so that you can get the process in place for your buy to let mortgage holiday as soon as possible. Ensure any conversations are followed up with with an email or letter confirming what’s been agreed, and keep copies in case you need to reference them at a later date.
Remember, your tenants are likely to be extremely stressed and upset due to their current circumstances. Treating them with kindness and understanding will go a long way to helping to agree a repayment plan for the rent that will be deferred and help all parties to maintain a good relationship going forwards.
If you’re not using a letting agent and manage the property yourself, set up a regular call with your tenant to ensure you have a frequent dialogue with them, for example once every two weeks, so you can work together to ensure you have a plan in place to help. A personal email or text to say how much you value them as tenants and that you’re there to support them will go a long way in these difficult times.
If you’re letting your property via an agent, make sure that that they are keeping in regular dialogue with your tenant to ensure that they are doing all they can to support them, and understand if there may be any issues with rental payments in advance. That way, you have the ability to speak to your lender in good time to get a buy to let mortgage payment holiday in place should you need, making the process smoother for everyone involved. Follow up any calls you have with your letting agent in writing, either by letter or email.
Follow Louisa on Twitter: @louisafletcher
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