How Coronavirus is Affecting the Lettings Sector


How Coronavirus is Affecting the Lettings Sector

The current Coronavirus outbreak has affected all aspects of life, and the lettings sector is no different. These are uncertain times for letting agents, landlords and tenants alike. The government has put in place a selection of measures to help employees, employers and the self-employed, as well as for homeowners and renters. Keep reading to find out how Coronavirus is affecting the lettings sector.

Obviously, there is a lot of legislation to take in, so we have picked out the main points for you to digest. If you have any further questions, you should visit the government website or talk to HMRC who are putting many of the proposals into action. Here are the main ways in which Coronavirus is affecting the lettings sector.

Tenant Rental Payments

Although the government has worked with mortgage companies to allow a three month payment holiday for homeowners whose livelihoods have been affected by the Covid-19 outbreak, there is no equivalent for private tenants.

The government feels that, in cases where tenants are employed, the Job Retention Scheme will help cover them and their expenses. This allows employers to furlough employees, meaning they remain officially employed, but they do not have any work to do. In this case, the government will pay 80% of their wages, up to £2,500 per month until they return to the workplace.

For self-employed tenants, the package is similar, but they can continue working while also picking up a grant. This grant equates to 80% of their average monthly profit, taken over the past three tax years. The maximum is £2,500 per month and will be paid in a three-month lump sum. However, this aid will not be in place until June, it is thought, leaving some self-employed renters struggling before then.

Possession and Court Proceedings

There is, however, a safety net for renters who struggle to pay their dues. Both the ‘no fault’ Section 21 notice and the Section 8 for evictions (which are often used for rental arrears of two months or longer) are now three-month notices. However, landlords are “strongly advised” not to bring new cases during the pandemic. In addition, court possession proceedings and evictions are seemingly being suspended for three months, with the potential for lengthy delays depending on the length of the lock down.

Despite how Coronavirus is affecting the lettings sector, there are no measures to help landlords or letting agents if their tenants cannot afford to meet their rent. Landlords could take the three-month mortgage holiday if they have one. However, they may end up paying more in interest over the term, as the holiday merely defers the payments until later.

Legal Obligations in Tenancies

In tenancies where the renters pay the Council Tax and utility bills, the legal obligation to pay lies ultimately with landlords. If tenants miss payments due to financial strain during the COVID-19 outbreak, the landlord will be held responsible as the owner of the property.

With restrictions on leaving home for anything other than essential reasons and a requirement to stay at least two metres away from anyone who isn’t a member of your household, routine inspections and checks are sometimes proving challenging to carry out. If a tenant is self-isolating having shown symptoms of COVID-19 or having been in the presence of someone with symptoms, it will not be possible to visit for repairs or tests. In these circumstances, the government says that landlords and letting agencies will not be “unfairly penalised…[for not] meeting some routine obligations.”

Landlords and lettings agents are still obliged to ensure tenants have a safe and warm place to live. They must deal with hazards in the most practical way possible. For minor issues, the government is asking tenants, landlords and letting agencies to come to a sensible agreement on the best way forward during the Coronavirus pandemic.

End of Tenancy Admin

Coronavirus is affecting the lettings sector in terms of what happens at the end of tenancies too. Although people are advised to delay moving home if possible, sometimes it is unavoidable. In these circumstances, deposit scheme providers are offering extended periods in which to perform final inspections on the home.

Any Other Questions on How Coronavirus is Affecting the Lettings Sector?

If you have any other questions on how Coronavirus is affecting the lettings sector, don’t hesitate to contact us and ask. You can use the contact form at the bottom of the page, and we will get back to you with the current official information during this fast-moving situation.

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To discuss our services further, or to arrange a meeting,  feel free to contact Kareen by phone, email,  or simply use the message form

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LET'S TALK!

To discuss our services further, or to arrange a meeting,  feel free to contact Kareen by phone, email,  or simply use the message form

kareen@executivepm.co.uk

 

0208 5757630