Coronavirus support for tenants
The government announced plans to protect renters affected by COVID-19 on March 26th 2020, just a few days after the quarantine ‘lockdown’ period began. The full government guidance, which specifies that renters of social and private accommodation cannot be forced out of their home, can be found on Gov.uk.
But read on for the key points that will help you plan your next steps.
Can I be evicted from my home?
From March 26th 2020 to September 30th 2020, landlords had to give all renters three months’ notice if they intend to seek possession and serve notice that they want to end a tenancy. On August 21st 2020 the eviction extension was extended by 4 weeks until 20th September 2020, and the three-month notice period was extended to at least a six-month notice period.
This six-month notice period will remain law until March 31st 2021.
The extended tenant protection applies to most tenants in the private and social rented sectors in England and Wales and covers all grounds of evictions, including possession of tenancies in the Rent Act of 1977, The Housing Act 1985, the Housing Act 1996 and the Housing Act 1988.
From March 27th 2020 the courts also suspended all ongoing housing possession action. This means if your case is in the courts system, or soon to be, the case cannot continue to the point that a tenant is evicted.
This suspension on court action is in place until 20th September 2020, which means landlords won’t be able to get a court order to evict tenants until this date at the earliest.
The new rules apply to all private and social renters in England and Wales, including mortgage holders and people with licenses covered by the Protection from Eviction Act 1977.
Tenants in rented accommodation are still responsible for paying their rent on time, and should pay this as under normal circumstances, unless they are facing financial hardships and are struggling to pay.
Support is available for any tenant unable to pay their rent; however, they are recommended to discuss their circumstances with their landlord in the first instance.
The government has said it encourages tenants and landlords to collaborate in order to agree a new rent payment scheme that works for both parties.
Additional measures are being put in place that could help renters to pay their rent on time:
- The government is planning to extend the pre-action protocol to the private rented sector to assist landlords and tenants in agreeing repayment in the case of arrears
- A £500 million Hardship Fund has been made available to local authorities to help households facing financial strain
- The Coronavirus Job Retention Scheme, launched by the Chancellor, pays up to 80% of a worker’s wages, up to £2,500 per calendar month (this will come to an end in October 2020)
- Universal Credit and Housing Benefit increased from April 2020, with Local Housing Allowance rates paying for at least 30% of market rents in each area
I’m worried about being made homeless. What should I do?
If a tenant is made homeless during the coronavirus pandemic or threatened with homelessness by their landlord, they should contact their local authority as soon as possible. If they agree that a tenant is legally homeless or threatened with homelessness and they are eligible for assistance they have a duty of care to help.
Local authorities have also been instructed to help people who are sleeping on the streets or at risk of it, despite them not normally being considered eligible for assistance.
A local authority should provide assistance during the pandemic even if you are not a priority case, although their help could be more limited or even withdrawn for this reason.Priority is based on vulnerability, which can apply to health, age and various other factors.
Those over 70, or in a clinically vulnerable group, have a stronger case for being considered vulnerable and in priority need for help. We recently wrote about the true cost of homelessness in our country.
For more information on how to get help if you face being made homeless visit crisis.org.
How can I save money and budget during coronavirus?
One option to help you prioritise your available cash is to review your outgoings and see what you can defer or negotiate on.
A number of areas have changed in response to COVID-19, including insurance, with new routes to payment holidays now available.
It’s possible to defer insurance payments after the Financial Conduct Authority (FCA) asked insurance providers from the 18th May to provide payment holidays and refunds for customers who are struggling to make payments as a result of COVID-19. The move means insurance policyholders can defer costs temporarily, without losing cover on many forms of insurance including car, home and travel policies.
The FCA confirmed that the end date for requesting payment holidays would be 18th August 2020.
To apply for help, contact your insurer to discuss a solution, whether that’s a payment freeze, reviewing your cover, making reduced payments, or waiving any fees.
If the policyholder will struggle to make payments when the payment holiday ends they should contact the provider to come up with a solution to avoid them missing payments in the future.
Coronavirus savings tips
We’ve put together a guide to help save money during the coronavirus pandemic. Learn our top five tips to be in a solid financial position when the situation improves.
Budgeting can also help money management during times of financial stress. We’ve written about some of the best budgeting apps to help people manage their money during these unusual times.
Coronavirus support for landlords
Finally, let’s look at things from the other side of the fence. As mentioned, landlords have to give tenants at least six months’ notice for evictions (instead of the usual two months given by Section 21 eviction notices) from March 27th 2020 to March 31st 2021.
Because the courts have suspended all housing possession proceedings until 20th September 2020, landlords won’t be able to apply for a court order to evict tenants until this date at the earliest.
The government encourages landlords to avoid serving eviction notices to tenants where possible. Instead, they advise landlords to work together with tenants to resolve any issues outside of court, whether that’s agreeing on a reduced payment plan or some other course of action.
Can landlords sell their property during the pandemic?
Landlords who might be experiencing financial struggles during the virus, could sell one of their portfolio of properties. Whatever the reason landlords are looking to sell, they might not know if it’s possible during the current crisis.
The housing market is open so you can put your property on the market, although you would have to consider new restrictions regarding viewings for example, including any social distancing measures.
If you have tenants in the property, you won't be able to evict them in order to sell (because of the regulations detailed above). Another option could be to sell your property with tenants still living in the property.
How can landlords access the mortgage payment holiday?
Landlords can apply for a three month coronavirus mortgage payment holiday by contacting their provider. During this time they won’t have to make any payments to their lender.
Landlords are eligible to apply for a payment holiday when they are up to date with their mortgage payments, which could help them financially if their tenants can’t pay rent due to financial troubles caused by COVID-19.
Lenders have announced that applying for a mortgage holiday should not affect the borrower’s credit rating. When the mortgage holiday is over, the landlord will make up the missed payments in future months as agreed with the lender, often by spreading the amount over the remaining term of the mortgage.
Read our guide on how to apply for a coronavirus mortgage holiday payment for more information.
Lenders cannot continue or start repossession proceedings against landlords until 31st October 2020 at the earliest.
Should landlords remortgage during COVID-19?
If landlords are struggling to pay their mortgage they can also consider remortgaging to make monthly payments more manageable. Note that if you extend the term of the mortgage to reduce the monthly repayments, it will very likely cost you more overall in the long term.
Compare remortgage options and buy to let mortgages
If as a landlord you’re considering remortgage deals and buy to let mortgages, take your time to research the market.
These are strange times and at moments of uncertainty it’s especially important to know what your options are. By using a comparison tool you can view a wide range of mortgages to help you understand your options as we move out of the coronavirus pandemic.