Every single human being on this planet is both concerned and affected by the Covid-19 Corona virus in different ways. During these difficult times, it is important that we all remain level-headed, which is why I am sharing my private thoughts with those of you who rent your home and those of you who own those properties.
Above all, please show compassion and think about what will happen when this crisis is over.
- A “rent holiday” or a “mortgage holiday” is not the same as free money. It MUST be repaid.
- If you are able to pay it is extremely important that you do so, for reasons covered later in this list.
- If you work for a business which has been closed then you will receive 80% of your salary subject to a maximum of £2,500 a month. On this basis, you should be able to afford at least 80% of your rent or mortgage payments, if not more, because you will not be spending money on fuel, commuting, socialising etc.
- If you are claiming benefits, these will be paid as normal, so you should be able to pay for everything as you previously did.
- Further clarification is necessary from Government in regards to how self-employed people (including landlords) will be assisted through this crisis.
- If you are genuinely unable to pay some or all of your rent or mortgage, then open and honest communication with your landlord or mortgage lender is essential from day one. To claim a payment holiday will require you to prove that you are unable to make payments in full due to the crisis. There is no free money, it will need to be repaid, plus interest.
- If you are able to do so, it is better to borrow money than to miss rent or mortgage payments. Having a roof over your head is one of the essentials in life, such as food and warmth.
- If landlords fall into arrears on their mortgage, without good reason, good communication and documentary evidence of all of that, it is highly likely that their mortgage lenders will take possession of the property and look to sell it with vacant possession. This might not happen immediately, but it will happen at some point. If this happens on a large scale, tenants will find it extremely difficult to find another property to rent for the same price.
- Landlords will be able to recover possession of their properties when this crisis is over, as will their mortgage lenders if they are in arrears. They will also be able to obtain judgement for debt. You will need a good credit profile to be able to buy or rent property in the future.
- Some landlords will have Rent Guarantee Insurance and Legal Fees Protection policies. This means that if you do not pay your rent an insurance company will pay your landlord instead. The problem with this is that the insurance company will then chase you for the rent arrears and pay all of the landlords legal costs to deal with your eviction and judgement for debt, as soon as they are allowed to do so. Landlords are unlikely to have any control over this once a claim has been made.
- It is the moral duty of us all to assist each other through this crisis and to ensure that a housing crisis doesn’t follow Covid-19.
Please take a long term view.
I welcome your comments.
God bless us all.