Government must give clear statement on rental payments

I sent a copy of the 21 page ' Consolidate guide to landlords and tenants Covid19' the Govt document issued last week, and which was published on your daily missives, to my tenant. This clearly states that tenants should continue paying rent. She was very grateful to see it as it also addresses what could be a potentially difficult conversation, and offers advice to tenants on 3rd party resources.

The Ministry of Housing, Communities & Local Government publication seems to be quite clear on this, if someone renting can pay, then they should pay:
Consolidated_Landlord_and_Tenant_Guidance_COVID_and_the_PRS_v4.2

Reply to the comment left by at 06/04/2020 - 10:43
Hi,
Totally agree with Liz & Nigel. The Guidance is quite clear about the importance of continuing to pay; landlords & tenants having a dialogue when there's a potential problem, due to loss of income etc. and the various sources of help available.

See extract:
"1.1 As a tenant, should I stop paying rent during the outbreak?

• Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. The government has a strong package of financial support available to tenants, and where they can pay the rent as normal, they should do.
Tenants who are unable to do so should speak to their landlord at
the earliest opportunity.
• In many, if not most cases, the COVID-19 outbreak will not affect tenants’ ability to pay rent. If your ability to pay will be affected, it’s important to have an early conversation with your landlord. Rent levels agreed in your tenancy agreement remain legally due and you should discuss with your landlord if you are in difficulty.

I've also posted a number of bulletins in the Private sector of my website, one of which, points to the various sources of assistance
https://universalcreditadvice.com/articles/coronavirus-landlords-and-agents-helping-tenants-claim-assistance-with-rental-costs/

So, there's loads of information out there you can share with your tenants, especially those experiencing financial difficulty.

Bill

The Government created this confusion and must clear it up immediately. It has created havoc, will lead to unnecessary financial hardship, stress and litigation, and is detrimental to landlord-tenant relations.

It must also look to undo some of the other damage it has done - particularly the problems its blanket ban on evictions is causing. As it has legislated to force landlords to continue to house non-paying tenants, indefinitely in effect, it must fund the landlords to do so. There is currently no justice for landlords who should not be expected to continue housing anti-social and/or non-paying tenants and it is also not fair for neighbours and housemates to have to put up with them. There is no thought for what it is like during a pandemic to have to put up with rogue tenants - many of whom will now be ecstatic to realise they can't be evicted, despite their behaviour. As they have shown they are willing to cross the lines of acceptable behaviour, they are also more likely to behave recklessly in terms of potentially spreading the virus.

It should also repeal Section 24, which is any case an outrageous policy. It was not predicted to bring in much tax anyway - certainly not in the context of the billions now being spent by Government. Repealing it would at least help some landlords who are facing having to pay tax on no profit or even on a loss, because of this absurd policy.

Finally, the Government should re-define private landlords as self-employed workers. We should not have to continually defend the work we do to provide essential housing to a fifth of the population and have this falsely represented as 'hands off' investment. We all know that is a lie for portfolio landlords especially. Re-defining it would enable some landlords to benefit from the Government's financial package of support.

If the Government does not take these kinds of measures the sector will inevitably shrink. This will mean more homelessness and it will damage efforts to rebuild the economy as many landlords have simply had enough of this continual onslaught and will not provide the homes mobile workers need.

In sum, the risks of being a landlord are becoming too numerous and onerous and something has to give.

Ben says a lot and the Government just ignores him every time. New organisation but the same response, nothing.

Reply to the comment left by Bill irvine at 06/04/2020 - 10:54
"In many, if not most cases, the COVID-19 outbreak will not affect tenants’ ability to pay rent."

This is correct. Those who cannot pay because they don't have jobs any more or won't qualify for support for the self-employed when that comes along in June have universal credit. So the government needs to make sure that UC works properly and that the self-employed don't fall through the support net.

Some people will have short-term cash flow problems and the goverment needs to relax bank lending criteria to allow for that.

Telling people not to pay their landlords would just create a different crisis.

Iritatingly everyone keeps claiming that help is available to landlords - NOT TRUE if there is no mortgage, please stop suggesting that we are all getting help!

Reply to the comment left by Paul Essex at 06/04/2020 - 12:03
It is quite correct to say that we are not all getting help. These are the government figures for business population as of 2019.

https://www.gov.uk/government/publications/business-population-estimates-2019/business-population-estimates-for-the-uk-and-regions-2019-statistical-release-html

99.9% of the business population are SMEs. There are 5.9 million UK private sector businesses. Historically SMEs have employed the most people and also created the greatest *growth* in employment. Small businesses are the engine of the economy.

However, 1.4 million of these businesses have employees, and 4.5 million have no employees. I.e. they are self-employed. The self-employed have been told they might get some help from June. They are not getting any help at the moment.

At the moment small businesses are having difficulty getting "business interruption loans". The banks are offering them their own loans instead - although I think that was how it was set up - you were supposed to be able to get a business-interruption loan, but only if you were not eligible to borrow.

Anyone who was running a small business at the time of the last financial crisis will recall that the government bailed out the banks (except Barclays who sought funding elsewhere). The banks then trousered the money and carried on as normal; the banks did not lend. Now, even if you got a "business interruption loan" it would probably not be enough. You'd still have to borrow and for most people the source of borrowing would have to be either their Principle Private Residence, or a BTL if they had one (most BTL landlords have 1-2 properties, not a big portfolio). As I recall bank-lending criteria are that you have to have an average of £25K turnover per annum for the last three years. But if your turnover just collapsed because the government shut down the economy that just gave you an extra headache. It's even worse if you started a small self-employed business in the last twelve months because you won't even have the proposed help that is supposed to be coming the way of the self-employed in June.

Just as small businesses are the greatest source of employment, the greatest source of growth in employment and are the engine of the economy, the value of the UK housing stock is the rock on which this is based. So if the government destroys the value of UK housing stock as a consequence of what it perceives it has to do to respond to COVID19 the government will create a recession that is not just very deep, but very long-lasting and very painful.

Telling tenants they don't have to pay their rent will just create another, bigger crisis.

Reply to the comment left by Paul Essex at 06/04/2020 - 12:03
100% correst Paul as am also in that position.

Reply to the comment left by Matarredonda at 06/04/2020 - 13:49
It's not just about mortgages. As a landlord you have lots of other costs and responsibilities besides making the mortgage payments and successive governments have made all these things harder for you.

Most BTL landlords do not have big portfolios. They have 1-2 properties that they bought to supplement their income, as a retirement fund, or both. A few weeks ago I saw a press release saying that for the first time the value of UK pensions have increased beyond the value of UK housing stock. That's probably just switched because so many pension funds are invested in the stock market and the stock market just crashed. Most BTL landlords have a small portfolio that they rely on to supplement their income or for their retirement.

If the government permits the tenants-good-landlords-bad rhetoric to hold sway they will be allowing a left-wing element to attack the economy and in the end that will probably kill more people indirectly than Covid19 does this year. For the most part they will be attacking small businesses and people who worked very hard to get where they are today. Many of those people are not eligible for the support now being provided to the *minority*. Because the available support is support being provided to the minority.