- by Admin
- in News & Legislation
The UK government has taken important steps to protect tenants during the pandemic. Here, we give an overview of the emergency measures and explain how we’re helping our landlords to manage them with free insurance cover and support.
Earlier this year, as coronavirus swept the country, the UK government announced emergency measures to protect tenants from losing their homes during the crisis. With rising unemployment brought about by the pandemic, it was an important step to stop a surge in homelessness among those who had unexpectedly lost their jobs or saw income slashed.
For landlords, it has been a difficult situation to manage, but at Urban Village, we’ve taken steps to minimise the impact of coronavirus on both our tenants and our landlords.
Here, we explain the tenant protection measures and how landlords can protect their rental income in the months ahead.
Ban on evictions
The emergency measures included a ban on all evictions. Initially, for 3 months, the ban was extended as lockdown continued, with Housing Secretary Robert Jenrick announcing a further 4-week extension at the end of August, bringing the total length of the ban to 6 months.
6-month notice periods on all properties
New six-month notice periods were also announced, to give tenants further protection from eviction over the winter. This notice period applies to all rental properties until 31st March 2021, with the exception of cases that include serious issues with the tenants, such as anti-social behaviour, criminal activity and domestic abuse.
Eviction hearings
Possession hearings have been suspended until 20th September. When they do resume, Jenrick has stated that priority will be given to cases with serious issues (as mentioned above) and where landlords have not received rent for over a year and would otherwise face unmanageable debts.
Will the measures continue past these dates?
The pandemic is not yet over, and the government has stated that these measures will be kept under review, with decisions guided by the latest public health advice.
Are landlords protected?
While the steps taken provide much-needed protection for tenants, they do leave landlords in a tricky situation if rent is not paid.
The government did announce a 3-month mortgage holiday for buy-to-let mortgage holders, intended to give relief to landlords affected by tenants unable to pay their rent.
But landlords should be warned: these mortgage holidays can actually cost more in the long run than they save in the 3-month period, thanks to higher repayments and/or interest further down the line.
What else can landlords do to protect their rental income?
We advise all landlords to take out rent warranty and legal protection insurance. We offer free protection for the first year on all our managed properties.
After the first year, the annual cost is well worth the financial security should rental payments be compromised – particularly when it comes to legal fees. The policy that we offer at Urban Village covers up to £100,000 of legal costs, which are a must-have if landlords do need to take action further down the line.
How likely is it that rent won’t be paid?
During lockdown, Urban Village maintained 90% of full rental payments, which was above the 87% figure nationally. For much of the remaining 10%, we negotiated reduced rents, or payment plans, making the situation easier for the tenant and landlord alike.
But, as the pandemic continues, landlords are likely to see more disruption, particularly if further lockdowns are announced and more jobs are impacted. As government incentives to keep people in employment come to end, we could see another wave of redundancies, that may impact on rental payments.
What should landlords do now?
Our advice to landlords is:
- If you are a private landlord, switch your property to a managing agent. It will make it much easier to manage should problems arise. Our landlords have experienced minimal disruption over the last 6 months, thanks to our communication and management.
- Take out insurance. It is a much more cost-effective and long-term solution than a mortgage holiday.
One last thing…
We are offering free rent warranty and legal protection insurance for 12 months on any new property managed by us.
Whether your property is already managed or you’re managing it personally, it’s a crucial time to make sure you are fully protected.
To find out how we can take the stress out of renting your property, call us on 0203 519 9121.
Useful resources:
The latest government update:
https://www.gov.uk/government/news/jenrick-extends-ban-on-evictions-and-notice-periods
Mortgage holidays: a break is tempting, but it will cost you
https://www.theguardian.com/money/2020/may/09/mortgage-holidays-cost-payments-coronavirus
Advice from Shelter to tenants:
The government’s initial statement from March 2020: