Three month mortgage payment holiday extended to Buy to Let

by Property 118

18:45 PM, 18th March 2020
About 4 months ago

Three month mortgage payment holiday extended to Buy to Let

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Three month mortgage payment holiday extended to Buy to Let

The government has announced a radical package of measures to protect renters and landlords affected by coronavirus. As a result, no renter in either social or private accommodation will be forced out of their home during this difficult time.

Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.

Recognising the additional pressures the virus may put on landlords, we have confirmed that the three month mortgage payment holiday announced yesterday will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus. This will alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result.

At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.

To support this announcement the government has worked with the Master of the Rolls to widen the ‘pre-action protocol’ on possession proceedings, to include private renters and to strengthen its remit. This will support the necessary engagement between landlords and tenants to resolve disputes and landlords will have to reach out to tenants to understand the financial position they are in.

The government will also issue guidance which asks landlords to show compassion and to allow tenants who are affected by this to remain in their homes wherever possible. The National Housing Federation and Local Government Association have welcomed the new support for social renters and made clear that no one should be evicted because of the coronavirus.

This important step on buy to let mortgages ensures parity of support, further to the announcement yesterday that the government made for private mortgage holders. We are also announcing that those who have benefited from a government backed Help to Buy equity loan will be offered interest payment holidays if they are struggling to pay due to coronavirus.

Housing Secretary Robert Jenrick MP said: “The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.

“These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage. Which is why we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.

“These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time.”



Comments

AP

18:58 PM, 18th March 2020
About 4 months ago

I wonder what proof is going to be required? I know some of my tenants will definitely need help and I’ll do whatever I can for them, others may still be on full pay but will tell me they aren’t sadly....

Also what happens if you have rental guarantee insurance? I always take policies out now, but they have very strict rules about starting the eviction process to be able to claim on them. Does that mean they are no longer valid as that would both be immoral and now illegal (therefore premiums paid for for no reason?!)

Binks

19:12 PM, 18th March 2020
About 4 months ago

Reply to the comment left by AP at 18/03/2020 - 18:58
Very good point regarding rent protection insurance and just what we’ve been discussing at home after listening to one of the Q&As on BBC, where the reporter implied that many landlords “will be fine as they are insured”. Uninformed comment. I agree that based on my insurance T&Cs, eviction process needs to have been started, which is not something one would want to do in a situation where well intentioned tenant truly struggles due to the pandemic. So insurance seems to be useless here.

Mike D

23:10 PM, 18th March 2020
About 4 months ago

We all know that 3m unpaid rent, will take at least 12m to pay back, so landlords will still be filling the empty space and acruing interest on the unpaid mortgage payments, so landlords will still loose out.
Maybe the 3% above base rate late payments charge should be added.

Porky

1:01 AM, 19th March 2020
About 4 months ago

This is all fine and dandy if the tenant loses the ability to pay all of the months rent for a few months and you can agree a sensible 'repayment plan with the tenant to equalise the loss of rent. But what happens if the tenants job is lost completely due to the business they were employed in goes under and the tenant is unable to get another job? We could now be 3 months down the road and no rental payments made with no prospect of any further payments. So said tenant either leaves your property or you are then needing to begin an eviction process. In either case you are very unlikely to recover any lost rent and you are months away from 're letting. Your mortgage provider is sitting pretty as their mortgage holiday offer just delays completion of the mortgage term so they will get there interest accrued and the principle sum but you have just lost 3 plus months of rent. How generous you are.

Hardworking Landlord

7:37 AM, 19th March 2020
About 4 months ago

I wonder what the situation is with S21 notices that have already been issued? I have a tenant with 2 months arrears, and about to be 3 moths in arrears. The move out date is 7th April but I am sure he will not move out if he does not have to.

Andrew

8:39 AM, 19th March 2020
About 4 months ago

Why can’t the government help the public out by paying the rent for the said time. That way the tenant is in a secure place and the landlord is in a secure place and the tenant will have to agree to paying the government back the money.
Or the government should offer the tenants an interest free loan to pay the rent for the said months if they qualify. I feel some tenants may well take advantage of this situation and not pay at all, especially in HMO properties, none of this is taking HMO accommodation into account.

Porky

8:49 AM, 19th March 2020
About 4 months ago

Reply to the comment left by Andrew at 19/03/2020 - 08:39
Yes I couldn't agree more. Why does the landlord have to get involved with a tenants financial problems. The government the opposition government and even the NRA are just out to kill off the PRS and kick the landlords teeth in.

David Atkins

9:12 AM, 19th March 2020
About 4 months ago

I’ve just 3 minutes ago called Leeds BS about payment holiday for my residential mortgage but they said that they are NOT offering payment holidays. They will need time to digest the Chancellors statement and have asked me to check their website regularly for updates. They checked my contact details but I formally asked for a payment holiday yet still No until Leeds BS have digested the chancellors statement.

Matarredonda

9:19 AM, 19th March 2020
About 4 months ago

Reply to the comment left by Porky at 19/03/2020 - 08:49
Agree fully.
All think landlords are wealthy and have a bottomless pot of money.
If the Government paid the rent because they will know who is genuinely laid off unable to pay through the tax system they could recoup as a tax charge when this pestilence subsides.

David Atkins

9:58 AM, 19th March 2020
About 4 months ago

They've now updated website and are offering payment holidays based on an individual basis. Interesting that mortgage companies are lagging behind the govt responses. I have landlord colleagues who have been told they won't be getting their rent this month (partly due to the information released to the media) and so landlords are understandably panicking.

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