Government must give clear statement on rental payments

Government must give clear statement on rental payments

8:51 AM, 6th April 2020, About 2 years ago 63

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The NRLA are calling for a clear statement from government in response to campaigners’ calls for rent payments to be stopped during the coronavirus crisis.

More and more landlords are contacting the National Residential Landlords Association saying their tenants are under the impression they no longer have to pay rent as a result of the pandemic.

The association is now asking government to clarify its guidance; that rents should continue to be paid where possible.

Some tenants believe that because lenders have provided the option of a three month mortgage payment holiday to landlords, they should not pay rent for this period.

Groups including the National Union of Students are also campaigning for rent breaks for tenants.

While the NRLA believes flexibility is necessary during these unprecedented times, it is calling on the Government to better publicise its guidance that tenants must still meet their legal and contractual obligations where they can – including paying rent – to dispel any myths.

Speaking for the NRLA, its Chief Executive, Ben Beadle, said:

“The mortgage repayment holiday is only available for landlords who are struggling to make their payments because their tenants are unable to pay part or all of their rent as a direct result of the coronavirus and through no fault of their own. It is not an automatic payment holiday and landlords who successfully apply still have to make these payments later on. It is not a grant.

“What it does allow is that where a tenant is having genuine difficulty in meeting their rent payment because of a loss of income, landlords have much greater flexibility to agree a mutually acceptable plan with the tenant to defer the rent due.

“This is not a green light to tenants everywhere to stop paying their rent.”

Given that 94% of private landlords rent property out as individuals and 39% have reported a gross non-rental income of less than £20,000, many depend on the extra rental income for their livelihood. Without this rent many would be unable to continue letting property, leading to a housing supply crisis when the epidemic eases, particularly for students returning to university.

Tenants are able to make use of assistance provided by the Government to replace lost income if need be including through the Job Retention Scheme, increased housing support through the benefit system and maintenance loans which continue to be paid to students.

The NRLA has called on landlords to show as much flexibility with tenants as they are able to within their means and has been heartened by the many stories showing tenants and landlords pulling together at this difficult time. This has included landlords offering properties rent free for NHS workers where they afford to do so.



Comments

by Bill irvine

13:37 PM, 12th April 2020, About 2 years ago

Reply to the comment left by akhan at 11/04/2020 - 21:41
Hi Akhan

Your posts at 20.44 & 21.41 are somewhat contradictory and misleading, in terms of the importance of the cited caselaw.

Apart from your 4 posts, citing the High Trees case, I've never seen any suggestion of a landlord, on this forum or elsehwere, proposing to vary their contract, in terms of "consideration" i.e. the amount of rent they charge.

Most landlords have a right to expect payment, in accordance with the terms of their AST, especially where the tenant has been in receipt of Housing Benefit or Universal Credit since before the lockdown. From April, 20 the monthly standard allowance has risen by roughly £90 pcm and the LHA rate can now be paid at the 30th percentile, reducing or eradicating any shortfall caused by the previous 4 year freeze on LHA. The Government guidance cited by me, in an earlier post, supports that view.

However, for those directly or indirectly affected by Covid 19, who experience significant or full income loss, and accepting there is likely to be a lag, between being furloughed, having reduced hours, becoming reliant or partially so, on SSP, ESA or being forced to stop non-essentail work and receiving the promised 80% of earnings, SE Grant (in June), or Universal Credit top-up, including "housing costs", there may well be a genuine reason why the tenant cannot pay the full monthly payment.

In those circumstances, landlords should surely accept payments to account, reducing the rent arrears, just as they've been doing for years, without, in any way, prejudicing their rights. Accepting part payment, in those circumstances, with joint acknowlegement full payment is still expected sometime later, when the financial climate improves, is exactly what the Government expects.

To refuse part payment, and insist on full payment, as you seem to be suggesting, is contrary to what's expected and completely at odds with the Pre-action Protocols which may yet be introduced to PRS recovery processes.

Bill

by akhan

14:16 PM, 12th April 2020, About 2 years ago

Reply to the comment left by Bill irvine at 12/04/2020 - 13:37
I am not saying that!

I am stating that you must confirm to the tenant that they are still liable for the remaining balance and that you have not agreed to waive the remaining balance when then make these part-payments.

To avoid them running the argument of promise estoppel when you chase them for the outstanding monies !

by Ingrid Bacsa

18:28 PM, 13th April 2020, About 2 years ago

Reply to the comment left by Clint at 11/04/2020 - 22:16
Clint, thats well done to you for having repayment mortgages. Yes the government found landlords out to be a cash cow, the easiest sector to impose taxes and penalties upon because we are are the only group who cant defend ourselves and protect our profits.

From what I understand property will pick up when this pandemic ends due to low interest rates and high demand. That will then be my escape. I'm considering investing into a property development company with guaranteed annual rates of return instead.

Best of luck to you.

by Clint

12:00 PM, 14th April 2020, About 2 years ago

Reply to the comment left by Ingrid Bacsa at 13/04/2020 - 18:28
Thanks for wishing me luck. It seems that we all need a lot of good luck. The properties I have on the market are at a standstill due to the pandemic although, they are priced to be the lowest in the area and I have had offers for two properties.
Worse still but hopefully they prove to be incorrect, the economists of the CEBR have predicted house price falls of 13% by the end of 2020 and the stock market has already priced in a fall of 12%. I don't want to be one spreading bad news especially since we have enough of it at present but, I always believe the more information you have the more prepared you can be.

by Ingrid Bacsa

10:22 AM, 15th April 2020, About 2 years ago

Reply to the comment left by Clint at 14/04/2020 - 12:00
Well if property drastically falls its best to keep renting and put up with the awful legislation. In my case i will benefit from the low interest rates. I did hear that property would recover swiftly though because of demand and because of the stock market falls.

Anything could happen .

Its gotta get better one way or another Clint. 😁

by Matarredonda

11:12 AM, 15th April 2020, About 2 years ago

Reply to the comment left by Clint at 14/04/2020 - 12:00
Stock market will have priced in falls in Commercial property prices relative to the big property companies as these are what are in investment funds.
Many of the owners of shopping centres and malls are in real financial trouble and have been for some time due in part to the debt they are carrying and in part due to the collapse of the High Street retail sector over last few years.
I would submit very different to residential property which still essentially has a shortfall.

by john mcghee

17:13 PM, 2nd May 2020, About 2 years ago

Reply to the comment left by Beaver at 06/04/2020 - 14:00
Well said Beaver, there are many costs to landlords that people dont understand . I have 14 properties in my portfolio, all of which are for sale l might add, and the costs of upkeep, insurance, repairs, safety certs and then tenants not paying rent leaves not a lot to play with.
I just wish people would realise the good work we do and stop thinking we are all " millionaires".
Thats my rant for the day, l have hopes we get out of this situation of covid 19 but think it will only add to the demise of decent landlords.

by Matarredonda

19:05 PM, 2nd May 2020, About 2 years ago

How right you are as way things are goi g the decent landlords will all exit the market.

by Ingrid Bacsa

10:00 AM, 3rd May 2020, About 2 years ago

Reply to the comment left by akhan at 12/04/2020 - 14:16
Which is exactly what our leaders want. Half of them will already be property magnets and will buy up cheap from us. Once the rich mega land LORDS have achieved their goal, the balance will switch in favour of landlords. How we small landlords were able to flourish for so long is amazing.

by Beaver

9:47 AM, 4th May 2020, About 2 years ago

Reply to the comment left by Ingrid Bacsa at 03/05/2020 - 10:00
It's worse than you think; the government just created an environment in which only the rich can borrow.


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