Impact of COVID-19 on landlords
Across the UK landlords are facing uncertain times, questioning whether or not tenants will be able to keep up with rent payments throughout the coronavirus outbreak. The government has set out support for landlords and tenants. But the key to getting through this time of hardship, is by maintaining an honest communication with your tenants and also your mortgage provider.
Support available to landlords
Contacting your tenant to ask if they’re experiencing financial hardship as a result of the coronavirus crisis is a good place to start, from here you can anticipate whether you will have a downfall in rental payments. If this is the case, certain banks are offering 3 month long mortgage holidays for buy-to-let. Although not an extensive list, banks currently accepting application include: HSBC, Coventry Building Society, Nationwide Building Society, Paragon Bank, Natwest/Royal Bank of Scotland, Santander Bank and Virgin Money. Good communication and compassion with your tenant is essential and will result in the best amicable agreement to get through these times together.
Contact your mortgage provider, most of the banks listed above have set up simple online applications. It is important to do this as soon as possible to secure your mortgage holiday period. It is also important to take note of the extra interest that will accrue on your loan as the balance remains outstanding. However, this is highly unlikely to be a bigger financial strain than the lack of rental income.
Also worth noting, is the Bank of England’s announcement of historically low interest rates at just 0.1%. You may be able to make savings on your mortgage monthly payments by switching provider. Especially if you are also able to arrange the payment holiday with the new provider.
Landlords must stick to the government guidelines, to prevent the process of any new evictions during the coronavirus epidemic. This of course, causes concern in the landlord community. This may mean you have to stick with troublesome tenants. The guidelines do however set out that tenants should still see paying rent as their responsibility. If facing financial difficulty they should contact their landlord immediately to set up a payment arrangement.
The full guidance can be found here.
Advice and information on how we as a business are handling the Covid-19 crisis can be found here.