With a lock-down in the UK now in place, let's look at the impact of Covid-19 for both landlords and tenants.
Landlords
What if my tenants cannot pay their rent?
This is perhaps the point that landlords (and tenants!) are most worried about. Rest assured, the government have put in place emergency measures to protect both landlords and tenants if this is the case.
Landlords are now able to apply for the three month mortgage payment holiday, just like regular home owners, through your mortgage lender.
Additionally, if you're aware that your tenant may struggle to make payments you should consider either: temporarily lowering the rent or seek specialist help via Shelter, Citizens Advice and The Money Advice Server.
What responsibility do I have towards my tenants?
We advise that you to take a pragmatic and common sense approach towards tenants during this time.
In this sense we recommend you encourage your tenants to regularly clean high-traffic areas within the household e.g. door knobs, bathrooms and kitchen appliances.
We'd also suggest reminding your tenants to limit their contact with one another and stay within their rooms whenever possible - especially in a large communal house!
Moreover, as a landlord you are still obliged to make gas/electrical safety inspections as well as urgent repairs to the property that could relate to health and safety.
What if one of my tenants have Coronavirus?
Per the government's guidance you should encourage all tenants to self-isolate for at least 14 days and you cannot remove them from the premises because of the virus.
Tenants that wish to leave the property due to the virus can do, but you are not obliged to provide alternative accommodation.
What is the impact on my holiday let?
Platforms such as Airbnb have now taken the decision to allow guest to cancel reservation and receive a full refund if the reservation is from 14 March 2020 until end of May 2020.
Due to the financial impact that it will have on you as a host, they have also taken the step to pay 25% of what you would have received if the reservation did occur between 14 March 2020 and end of May 2020.
I run a property business, how will I cope?
The UK government has introduced a 'Business Interruption Loan Scheme'. Your business would be eligible for an interest free loan up to £5m, as long as your annual turnover is less than £45m.
The interest and initial fees for the first 12 months of the loan will be covered via grant payments and of course you will be liable to pay the loan back in full after 6 years.
What are my options other than a loan?
You may want to consider applying for rental/income insurance, they typically cover periods over 6 to 12 months; will cover up to 5 tenants and rental income up to £3,000.
However, many insurers have begun to include Coronavirus exclusions within their policies with few remaining to be open to such an offering e.g. Zurich and LV= (subject to change).
Robert Jenrick, Secretary for Housing: "No renter who has lost income due to Coronavirus will be forced out of their home, nor will any landlord face unmanageable debts."
Tenants
More than 1/5 of UK households live in privately rented accommodation, with sick pay one of the lowest in Europe at £94.25 per week. As many can't work due to schools closing and looking after themselves and others, this is a huge concern for many.
Can I be evicted?
You'll be pleased to know that under the new legislation announced in light of the spread of Covid-19, all new evictions will require at least three month's notice and may change to six months if the government deems it necessary.
Will I still need to pay rent?
Yes, unless you have an agreement with your landlord. But, there have been calls for a 'rent-holiday' much like the mortgage-holiday in place for home owners, but there have been no official announcements on this.
I'm self-employed and now cannot work
A financial support package is now available to tenants that are self-employed and that have trading profits less than £50,000 in the last tax year or the same amount averaged over the last three years.
This package will cover 80% of your average earnings or up to £2,500 a month paid directly by the UK government.
Additionally, you may be able to access universal credit which equates to £94.25 per week.
Formal Government advice
More advice can be found in the following links:
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Contact us
Normette Homes specialise in property investment and tenant sourcing.
Email: info@normettehomes.co.uk
website: www.normettehomes.co.uk
