Landlords around the country are today, understandably, worried about the financial impact of COVID-19 (or Coronavirus) on them and their tenants as we make our way through this difficult time of uncertainty. As the number of cases of Coronavirus rises daily, we address some of the concerns and steps you can take as a landlord at this time.
What are the concerns?
- Younger people are particularly at risk of being affected by the economic changes in the UK due to coronavirus. Job losses, redundancies and Zero-hours contracts are all more likely to be impacting younger people, who are, often, more likely to be tenants rather than home-owners.
- Tenants who already struggle with meeting their rent obligations may find this more difficult and already strained tenant/landlord relationships become harder to bear.
- Bills and other financial obligations stack up, with childcare and static bills unable to be deferred, families get into difficulty quickly.
- Landlords are torn between meeting their own financial obligations including mortgage payments on their buy-to-let arrangements and allowing tenants the flexibility to manage payments for rent based on their specific circumstances.
What should you think about?
The Prime Minister today (18th March 2020) has announced that the Government will be bringing forward legislation to help protect private renters from eviction. And Kate Henderson, representative of the National Housing Federation, has confirmed that Housing Associations will not be evicting tenants falling behind on their rent who are affecting by the Coronavirus outbreak. The Residential Landlords Association has offered guidance to landlords concerned about how they will be impacted financially from the coronavirus. This includes the following:
- Speaking with your mortgage provider about whether you can negotiate a payment holiday or defer your home loan repayments for up to 3 months allowing you to be more flexible with your tenants’ obligations. Each bank has different rules, so chat with your bank directly about this.
- Allow tenants to pay their rent at a later date providing that the tenant has a good payment history. Most people will be honest about the financial pressure they are under as a result, so where you can, be flexible.
- Be sympathetic, says John Stewart, who is a policy manager for the association. Where you know you have the asset of the property to fall back on, renters don’t. This puts them in a precarious and frightening position during the coronavirus outbreak.
In addition to the Residential Landlords Association’s advice, it’s worth considering that your insurance may have cover for unpaid rent due to coronavirus – look into the specifics of the policy and enquire with your policy provider for information on exclusions and excesses etc. before making a claim.
This information is provided in an advisory capacity only. You should seek expert and professional support on any concerns before making a decision. If you need support, please contact our team here
Updated March 2020