Hello, Medway Property News readers!
Whilst the announcement of what has become known as “Lockdown 2.0” probably did not come as much of a surprise, it does cause concern for business right across England.
I have spent time over the past few days going over our operational processes for the coming month and one of the areas I have been reviewing is the current (and new – again!) legislation regarding the property market.
As well as a number of questions that I have sought advice on from the NRLA, I thought that I would consolidate some points as a brief summary of the current situation in terms of guidance and legislation for landlords.
I have outlined six key areas below which I hope you find helpful. In each section, where relevant, I have also included a link back to any previous related articles that will be able to give a little more information and context.
It was initially announced that landlords were able to apply for a three month mortgage holiday to go hand-in-hand with the announcement about rental payment holidays. It has now been announced that mortgage holidays of up to six months for homeowners are available.
What is concerning, however, is that this six-month payment holiday is not available for buy-to-let landlords. The NRLA has also informed me that they are not recommending landlords make use of the three-month mortgage payment holiday option as whilst it was confirmed there would be no adverse impact on credit records, this has been found to be incorrect.
The NRLA is appealing this, however – again – it appears that landlords have been left with no financial help whatsoever!
When it comes to evictions, the NRLA has informed me that the courts will remain open throughout the second lockdown and continue to process cases (however, undoubtedly at a slower rate!).
Landlords can continue issuing evictions proceedings as outlined when the evictions ban ended, however, bailiffs are not enforcing possession orders during the lockdown. In addition to this, bailiffs are not permitted to enforce evictions from 11th December to 11th January or for those areas under tiers 2 & 3.
I’d like to find something positive to write, however, this effectively leaves landlords in complete limbo as to when they will actually get possession of their property and is likely to lead to a rise in repossessions along with financial ruin for many good landlords. It will be very interesting to look back at this data in the coming 12 months!
There is no change to rent payment holidays and it remains discretionary as to whether landlords provide one.
However, it is my understanding that the courts are more likely to view an application for repossession more favorably if landlords are seen to be working with their tenants and a rent payment holiday is one way of demonstrating this.
Bounce Back Loans
The deadline to apply for a bounce back loan has now been extended to 31st January 2021 and it was announced that loans can last for ten years, with the option to take a payment holiday or interest-only period of up to six months. Whether the banks agree to this is another matter altogether, however!
I know of a few landlords who, shortly after this was announced, asked their bank if they need to do anything to extend the term and they were informed that the banks were not extending them. We will have to see what happens here over the coming months and I would certainly be interested to hear your experience!
Viewings, Moving & Management
A major difference between lockdown 1.0 and 2.0 is that the rental market remains fully and firmly open. This means that people are free to move, viewings can be carried out under COVID-19 secure conditions and the NRLA has confirmed that management of properties can continue as usual.
Because an HMO is really quite different from a single let property, however, at Home Share we are temporarily halting inspections. If a member of staff does need to attend a property (such as for a maintenance issue that cannot be delayed), they will follow the usual COVID-19 protocols.
When it comes to viewings, all potential tenants who wish to view a property must first conduct a virtual or video tour before being allowed a physical viewing. We are carrying out accompanied viewings, but either the viewer or the Home Share agent will have to stand outside while the other person is inside. As this poses some security risks, viewings will be going ahead only in unoccupied rooms.
Where possible, all of our move-ins are being done remotely and in the event that a tenant cannot complete a remote move in, needs to visit our office or a member of staff has to attend the property, we will be following the same protocols as with viewings.
Unfortunately, when it comes to landlords it appears that England has the raw deal and particularly in relation to rental payments as both devolved nations of Scotland and Wales have launched a loan scheme to support tenants with their rental payments.
It appears that the English Government thinks that landlords have got bottomless pockets and are able to continue to prop up the broken housing system. As my evictions specialist Mark Windsor from Evict Tenant Limited so aptly put it:
“It appears that the burden to deal with a potential lack of ability to pay rent has been shifted from the Government to private landlords”
“It is the business of the Government to support tenants struggling with arrears, not landlords who have a business to run, property to maintain, mortgage and bills to pay.”
Whilst the current climate for landlords is difficult, I do want to end on a positive note and as we now begin to look towards 2021, the property market shows great resilience over the long term and this is one thing that makes property such an excellent asset class.
Just remember, the current challenges will only be with us for a short period (although it may seem like an eternity now!), and whilst we will undoubtedly come out slightly battered and bruised, we will have strengthened our businesses and be able to look forward to expanding our portfolios further!
I trust that you found this article insightful and remember that you can book in an in-depth discovery call with me for £147 here. You are also welcome to get in touch with me via LinkedIn and I will be happy to answer any questions that you may have.
Lockdown 2.0 Landlord Advice & Guidance
Hello, Medway Property News readers!