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Coronavirus: Landlords need government financial help, they need it now

Coronavirus: Landlords need government financial help, they need it now 1

Due to emergency measures to be introduced by the Government, renters will receive protection from eviction. Landlords will not be allowed to evict tenants, during the coronavirus pandemic, for at least three months.

Tenant eviction Ban for at least three months

With these new measures in place, no renters, in private or social accommodation, will need to be worried about eviction. It is vital, renters who need to self-isolate can do so, without worrying about financial implications. To control the spread of Coronavirus, these new measures need to be put in place.

The Government is to issue guidance for landlords, highlighting the importance of showing compassion, to their tenants. It is essential for tenants, who are affected by Coronavirus to remain in their homes.

3 month mortgage holiday, for landlords

Some good news for landlords, the Chancellor Mr Sunak hinted at a three-month mortgage payment holiday, for landlords who may experience financial difficulties.

SPF Private Clients chief executive Mr Mark Harris says: “A three-month holiday for mortgage holders, who suffer financially as a result of Coronavirus, will be welcomed by many who have been worried about their jobs and how they will pay the mortgage.”

He adds: “Remember that as it stands interest will still be calculated throughout the payment holiday and then added to the loan along with the repayment part of the payment.

“The monthly direct debit may then be increased to cover the amount added once you resume your payments.”

Landlords with tenant rent arrears concerned

A landlord from Birmingham, Mr Henry Cadwell, said: “I have a case where my tenant stopped paying the rent, back in September of 2019. Currently, my tenant has rent arrears of £6,400. “

“I want to issue a possession claim, and my lawyers have said, they are unsure if the ban on eviction will affect my possession claim.”

“My tenant does not have coronavirus, besides the rent arrears stemmed from a period when we didn’t have coronavirus.”

He added: “I hope the courts deal with each case on its merit, rather than adopt a blanket attitude towards all possession claims. I am waiting to see the fine details regarding this ban for eviction, so I know where I stand.”

Mr Sasha Charles, the CEO of Landlord Advice UK, said: “I think it was important for the Government to act fast, regarding the renters who need to self-isolate. Landlords do seem to be showing compassion towards their tenants.”

Landlords will need Government financial help

However, within the last 10 minutes, the courts have confirmed they will not be issuing any possession claims, they have gone even further, and are cancelling all existing bailiff appointments. We are trying to get some clarity on the status of current pending possession claims.

The process to evict a tenant is a protracted process, that takes at least six months. The bailiff stage is the end of the process where the tenant is physically evicted. Why the existing bailiff appointments have been cancelled with immediate effect is unclear.

Buy to let landlords, who are waiting for bailiffs to carry out an eviction so that they can take possession of their property, will be extremely disappointed with this news.

Landlords with a claim for rents arrears, under section 8, may already be nursing rent arrears of 6 months, or more. With the court and legal fees already paid, landlords in such cases will be worried. Another three months grace on top of the current six months and to kick start the eviction process again later, will add another three months.

The chance of recovering rent arrears according to Landlord Advice UK, through the court process is less than 10%.

Some landlords, who have a pending possession claim, or a bailiff appointment, due to cancellation may be looking at a loss of rent, of 12 months or more.

Retired buy to let, accidental landlords, who rely on the income from their investment, do not have the safety net of the social security benefits. This is due to their income, albeit it on paper only, due to the defaulting tenant.

The Chancellor will need to take urgent action, to support landlords and the holiday on mortgage payments, will not be enough.

Mr Sajjad Ahmad, the CEO of the British Landlord Association, has urged the Government to take steps now, to offer financial support for landlords, who along with renters, may suffer financial hardship too.

Please read our blog for landlords on HMO’s and general guidance for landlords.

Download Coronavirus Bill

Here is the Coronavirus Bill just released by the UK Government: Coronavirus Bill 2020

Should any member require advice, regarding property inspection, or gas safety inspection, please contact our member helpline.

If you are a landlord and not a BLA member, join us, membership is free.

Source: British Landlords Association

Author: Marc Attwater

Date: 19th of March 2020

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