Business Rate Reliefs, Mortgages Frozen, Tenancy Eviction Bans it all seems a lot to take in right now so how can you profit (or at least ensure you are least effected) through these hard times ahead?…
We look at the current situation in the UK In light of the most recent announcement from Housing Secretary Robert Jenrick.
The plans include:
- Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place
- No new possession proceedings through applications to the court to start during the crisis
- Landlords will also be protected as 3 month mortgage payment holiday is extended to Buy to Let mortgages
James Kirimy, General Manager at Spotahome.com, the European wide medium-term lettings platform told us: “Across the rental sector, this will come as a very welcome support package from the UK government and one that was needed to calm the nerves of tenants and landlords as the situation worsens.
The nation’s tenants will breathe a sigh of relief today now that the Government have stepped up to match Tuesday’s mortgage payers’ three-month repayment holiday with financial support for them too should they find themselves unable to work.
Landlords will also rest easier tonight knowing that they are protected financially, in the short term at the very least.”
Marc von Grundherr, Director of leading independent London letting agent Benham and Reeves commented: “We’re all for state support at a time of crisis however there’s a significant unintended consequence of this announcement and that is the fact tenants now have nothing to lose if they simply stop paying their rent. It will simply be used as a literal get out of jail free card for all of the UK’s 16 million or so private and social housing tenants and this could leave a path of destruction within the rental market if not correctly implemented and monitored.
Let’s see what the detail reveal but at first glance, this perhaps goes too far unless there are specific criteria that must be met and proven before tenants stop paying and landlords claim their mortgage holiday. Ultimately, landlords will still have to pay as this approach is a deferral, not a let off. How will they recoup the rent if tenants are unable or simply refuse to pay it?”
Whilst Matt Hooker, Founder at Ome, the tenancy deposit alternative, says: “Very good news on the face of it and great that tenants and landlords will both be afforded the same protection as homeowners. There may have been a temptation to appease just one part of the rental food chain but it’s as important the tenants who will be struggling due to a lack of work are protected just as much as the landlords facing months of lost rental income.
Hopefully, these measures will be sufficient as any landlord that feels they are owed above and beyond the three months may turn to rental deposits to recoup these lost finances and we need to ensure this isn’t done unfairly through property dispute resolution.”
So what is likely to happen?
Landlord Today state that the chancellor’s promise of a three-month mortgage payment holiday to those affected by coronavirus has been extended to buy-to-let borrowers whose tenants are experiencing financial difficulties due to coronavirus.
The protection for landlords is designed to ensure that they do not have to handle unmanageable debts after the government said that no renter in either social or private accommodation will be forced out of their home during this difficult time.
Emergency legislation will be taken forward as an urgent priority so that landlords are not permitted to start proceedings to evict tenants for at least a three-month period, ensuring that no renters need to be concerned about the threat of eviction.
The housing secretary, Robert Jenrick, said: “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.
“These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time.”
Landlord groups are in favour with the governments legislation with Ben Beadle, chief executive of the National Residential Landlords Association, saying: “Landlord groups welcomes government support. We recognise the exceptional circumstances and we will work collaboratively with government to ensure these measures protect both landlords and tenants.”
In a joint statement, the Residential Landlords Association and the National Landlords Association said: “Our priority is to ensure that tenants are secure in their homes during this crisis. The three month buy to let mortgage payment holiday will take a lot of pressure off landlords enabling them to be as flexible as possible with tenants facing difficulties with their rent payments.
“No responsible landlord will be considering evicting tenants because of difficulties arising from the current situation. There does need to be some flexibility though such as with dealing with a tenant engaging in anti-social behaviour. This could cause misery for fellow tenants or neighbours especially when they are going to be spending a lot of time together.
“We would like to see further measures taken including pausing the final phase of restricting mortgage interest relief to the basic rate of income tax due in April.
“In addition we need to do all we can to prevent the spread of the coronavirus. There should be national guidelines for local authorities to suspend routine inspections of properties and a temporary halt on enforcement action where landlords are unable to fulfil certain required obligations because of the health risk posed to them, tenants and contractors.”
As of yet things still need to be finalised but rest assured there will be a number of compensation and allowance schemes to be put in place ahead and we will provide details on how to obtain these moving forward.