We know that as a Landlord, you will have many questions and concerns regarding your rental property. Here at Milne Moser, we have been given advice from our regulatory bodies to help us guide you through this difficult time.
Please see the below advice from the Residential Landlords Association.
As part of the series of reforms relating to the coronavirus pandemic, the Government has announced a number of temporary measures relating to the PRS. Most of these relate to restricting the ability of landlords to repossess their property for the duration of the emergency.
However, to ensure that landlords can temporarily absorb rent arrears if tenants lose their job or have a reduced income due to coronavirus measures, the Government has agreed with lenders that buy to let landlords will be able to claim up to three months of ‘mortgage holiday’ in situations where their rental income has been impacted by the coronavirus.
What is the position of the RLA?
The NLA and RLA welcome the Government’s work to agree a mortgage holiday for affected landlords with buy to let lenders, but they must go further to protect tenants’ incomes and reduce the impact on individual landlords.
We are calling for the Government to
- Protect tenants’ incomes. People who may have sadly lost their jobs or had a big cut in income need support to ensure they have enough to live off. As such we are calling for a temporary halt to the 5 weeks waiting period for the first instalment of Universal Credit to be paid.
- Reduce the burden on landlords, in line with other businesses by pausing the final phase on removing mortgage interest relief above the basic rate of income tax.
My tenant has been affected by the coronavirus. What should I do?
UK Finance recommend you contact your lender to discuss your options as soon as possible.
What are the criteria for applying for the mortgage holiday?
For buy to let landlords the key criteria is that their tenant must have been directly or indirectly affected by the coronavirus.
The other key criteria is that you must be up to date on your current mortgage payments.
I was experiencing financial difficulties prior to the coronavirus impact will I qualify for the holiday?
Mortgage holidays are only available to people who are up to date with their payments.
However, from 19th March 2020 mortgage lenders have agreed to suspend all possession orders and not start any new court actions for 90 days.
How do I establish my tenant has been impacted by coronavirus?
Mortgage lenders have agreed that landlords may contact their lender to self-certify that their tenant has been impacted. This done on the understanding this mortgage holiday will be passed down to their tenants.
What happens at the end of the mortgage holiday?
While payments are suspended for the duration of the mortgage holiday interest will continue to accrue on the mortgage and those mortgage payments will eventually have to be made up. Your mortgage lender will be able to discuss options with you to help repay the additional interest accrued.
Will my credit rating be affected if I take the mortgage holiday?
UK Finance have confirmed that ‘firms will make every effort to ensure that the payment holiday does not negatively impact on your credit file.’
Aside from the mortgage holiday what else can I do to ensure my tenant has a regular income?
Tenants who face severe financial difficulties during this time may qualify for Universal Credit. Landlords will be expected under the changes to possession law to assist their tenants where possible with making a universal credit claim.
If your tenant needs assistance with a claim normally the best way for landlords to do this is to arrange a time to meet with the tenant so they can provide permission for the landlord to speak to the DWP regarding their claim. This may not be possible if the tenant is self-isolating. We are asking the Government for clarity on this point as a matter of urgency and will update this guidance once we have further information.
If you have any queries that we can help with, please contact us on 01539 725582
