Last week it was announced by the government that they were introducing a radical package to aid both tenants and landlords during the coronavirus outbreak. The new legislation will protect both social and private renters who have been impacted by coronavirus from being evicted. Landlords will not be able to initiate proceedings to evict their tenants for at least the next three months.
This does not mean that renters can avoid paying rent at all, but they will be able to defer their rent payments for the duration of the period. This follows the same principle as the previously announced 3-month mortgage holiday for homeowners. The holiday has now been extended to buy-to-let landlords with tenants affected by the outbreak in an attempt to alleviate pressure for both landlords and tenants.
For landlords and property managers, it is also worth considering purchasing rent-guarantee insurance, which is available to buy through our platform, to minimise risk and loss of income.
The Housing Secretary, Robert Jenrick, stated: “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.”
How do I get a mortgage holiday?
The mortgage holiday is only available to those who are up to date with their mortgages and not in arrears. In order to apply for the holiday, you must contact your mortgage lender provider and make them aware of your situation.
In the past, you would have had to provide proof that your finances have been negatively impacted, however, due to COVID-19 this has been abolished to fast-track the process.
UK Finance has also stated that using this resource will not affect one’s credit score however interest will continue during this period and that accumulated amount must be paid back in conjunction with the total amount.
After the period is over, the Government announced it expects landlords and tenants to work together and establish an affordable repayment plan which takes into account the individual needs of the tenants’ circumstances.
With more 20 million people living in rented accommodation in the UK, it is reassuring to know that the Government has extended its aid to the rental sector and these new measures should reduce pressure on landlords and tenants so they can focus on remaining safe and healthy.
While praising government action, leading landlord organisations are calling on the government to build on these measures to further support the rental market in these unprecedented times by introducing efforts to support landlords without mortgages and boosting tenants’ incomes.