The property industry has really taken a battering of late, with three years of Brexit uncertainty followed almost immediately by a global pandemic… Who’d have thought? However, rather than solely ‘looking out for number one’ during the virus outbreak, landlords are showing empathy and compassion towards their tenants by supporting those adversely affected by the Coronavirus crisis – even if it means they take a financial hit in the process.
Out with the negative stereotypes
Landlords are often given a bad rap, with negative stereotypical headlines touted almost daily… A quick Google search reveals a plethora of negative headlines from ‘greedy’ and ‘cowboy’ landlords to unethical landlords accused ‘abusing human rights’.
However, these common, negative stereotypes don’t reflect the attitudes of the majority of property professionals today. The buy-to-let industry has become much more regulated and professionalised in recent years, and it is this professionalism and integrity that has really shone through in this time of crisis.
Landlords support tenants’ request for help
According to a new survey of over 4,500 landlords, 44 per cent of landlords have received a request for help from their tenants during the current COVID-19 crisis. Of these, 90 per cent have responded positively.
Nine out of ten landlords have been willing to support tenants struggling as a result of coronavirus, the survey by the National Residential Landlords Association (NRLA) revealed.
The kind of assistance the landlords have offered their struggling tenants included rent reductions, rent deferrals, a rent-free period, early release from a tenancy or a refund on service charges included in rents for homes of multiple occupation.
COVID-19 case studies
These survey results are backed-up by a large number of case studies about landlords offering to support their tenants, compiled by the NRLA. For example:
– Andy, a landlord who successfully applied for a three-month mortgage payment deferral and passed on the benefits to his tenants in the form of a rent payment deferral. He and his tenants have agreed on a repayment plan that works for them all.
– Sian, a landlord in Manchester, established a Whatsapp group so her tenants can easily keep in touch with her and she has sent them care packages with food.
– Ben, a landlord in Twickenham, who pro-actively contacted his tenants before the lockdown encouraging them to get in touch if they needed support. For some tenants, he has agreed to a proportion of rents and/or arrears to be deferred.
– Some landlords offered accommodation for free or at a reduced rent to those working in the NHS whilst others supported vulnerable tenants.
One landlord tweeted that: “My staff [are] compiling a list of elderly and vulnerable tenants, we have a lot, it’s what we do. Time to mobilise to help them in any way we can.”
The cost of COVID
Over half of the landlords surveyed said they had been affected in some way by the impact of the virus on their tenants with 54 per cent having experienced some combination of rent payment problems or unanticipated periods when properties are empty. Furthermore, 60 per cent of landlords who had declared rent arrears had experienced at least the equivalent of one month’s loss of income across their portfolio.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“This research proves that the vast majority of landlords are doing everything possible to support tenants through difficult times. To suggest otherwise is needless scaremongering and serves only to heighten anxieties for tenants when we need a spirit of co-operation.”
Adding to the challenges landlords face as a result of their tenants struggling to pay rent due to the pandemic, the government also passed an emergency law in March that prevented them from evicting tenants who had been served an eviction notice. This eviction ban period is due to expire on 25 June. However, the government is under an increasing amount of pressure to extend this period – or at least offer further support to tenants until they can return to their normal lives once the lockdown has ended. However, any further eviction ban extensions would likely leave landlords who are hoping to re-let their properties further out of pocket.
NRLA calls for support for landlords too
The NRLA’s Ben Beadle commented:
“As Ministers consider their next steps regarding the ban on evictions, they should not make it more difficult to take action against tenants who may be committing anti-social behaviour or domestic abuse, or where they are wilfully withholding rent which they can afford to pay.”
One bit of support landlords have been offered in the past few days, is an extension to the mortgage payment holidays facility. This means that those who have already taken a three-month mortgage payment holiday can benefit from a further three-month extension once their current payment holiday ends while those who haven’t applied at all, can apply up until 31 October.
However, landlords are being warned that they should only apply for mortgage holidays if they really need them as, although banks say there will no impact to the credit file of people who take a mortgage holiday, lenders can factor it into future applications, in other ways. The Financial Conduct Authority explains: “Payment holidays and partial payment holidays offered under this [emergency Coronavirus] guidance should not have a negative impact on credit files. However, consumers should remember that credit files aren’t the only source of information which lenders can use to assess creditworthiness.”
The current ban on repossessions of homes has also been extended to 31 October 2020.
“We need landlords who are going through a difficult time to have the confidence to stay in the market. Otherwise, we are only going to end up with a worsening housing crisis as more tenants chase fewer properties,” NRLA’s Ben Beadle concluded.