Buy-to-let landlords who find they have tenants struggling to pay their rent due to the coronavirus crisis have been thrown a financial lifeline.
The government has introduced a range of measures in an effort to ease the financial pressure many landlords and tenants will inevitably find themselves experiencing. One of the measures introduced is access to a three-month mortgage repayment holiday, the same as previously offered to homeowners.
Tracie Croft, property lawyer, commented: “Landlords and tenants need to respect each other’s position at this difficult time. Landlords are operating a business, but where the tenant is genuinely unable to pay their rent because of their current financial position, an agreement will need to be reached.
As part of the measures introduced by the government, landlords can no longer begin eviction proceedings for at least 3 months. During this time, I would recommend that the landlord and tenant work together to find an affordable repayment plan.”
Housing secretary, Robert Jenrick MP, said: “The government is clear, no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord faced with unmanageable debts. These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage…It’s important that everyone gets the support they need at this very difficult time.”
Some banks and building societies were very quick to roll-out the three-month repayment holidays for landlords. Nationwide director of mortgages, Henry Jordan said: “As the UK’s second-largest buy-to-let mortgage provider we feel it is important to extent protection to landlords and their tenants during this uncertain period. We have extended mortgage payment holidays to include rental properties so that landlords with tenants who are unable to meet the rental payments because of coronavirus are protected as much as possible.”
He added: “We would encourage tenants to speak to their landlords if they are impacted or worried about coronavirus to ensure that steps can be taken to support them.”
Suspension on home repossessions
The government’s three-month payment holiday plan offers reassurance to those who have borrowed for either residential or BTL properties that their homes will not be repossessed during this period of extreme uncertainty.
Stephen Jones, CEO at UK Finance, commented: “Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders want to reassure both homeowners and landlords who have tenants who may be affected financially that the industry is working hard to put measures in place to support them during these uncertain times.
“In addition, to the industry’s support for residential homeowners, mortgage lenders are extending the same support to buy-to-let landlords who have tenants experience issues with their finances as a result of COVID-19 and the options include a payment holiday of up to three months.
For those customers already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy to let possession action.”
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