Renters waiting for income support or not covered by government schemes should see a reduction in their rent if their landlord has secured a mortgage holiday and they risk breaching affordability criteria, the boss of one of the UK’s leading residential property consultants has urged.
In March the government announced landlords can apply for a three-month payment holiday on their buy to let morgages if their tenant is under financial strain as a result of the pandemic.
To help renters, the government has banned eviction proceedings from happening and urged tenants to work with their landlord in situations where they are struggling to pay rent.
A recent survey by Landlord Action found nearly three-quarters of landlords had been contacted by tenants about rent payments, highlighting the severe impact the lockdown has had on household finances.
Mary-Anne Bowring, group managing director at Ringley, which manages thousands of homes across the UK, has called for further support to help renters either not covered by income support schemes or who have not yet received the additional cash.
Bowring said tenants who are out of work and struggling on reduced incomes should be able to ask if their landlord has secured a mortgage repayment, interest, or repayment-and-interest holiday.
If their landlord has benefited from a mortgage holiday, renters should also be able to ask to have their rents reduced if they can prove they are not eligible for cash through the government’s income support schemes and their reduction in income leaves them below the original affordability criteria upon which their tenancy was originally assessed and granted.
Housing charity Shelter recommends tenants spend no more than a third of their income on rent, although in London renters can frequently pay up to 40 or 50 percent.
Bowring said:
“The word ‘unprecedented’ has been used a lot in response to the impact Coronavirus is having but statistic after statistic shows a level of damage not even seen during the worst of the Great Financial Crisis.
“The government has moved decisively to help protect tenants and landlords, but it is inevitable some households will fall through the gaps as the various income support schemes get up and running and payments are processed.
“Transparency is key, and renters have a right to know if their landlord has benefited from a mortgage holiday and if the tenant is struggling financially they should be able to request a reduction in rent.
“Any rent reduction must be conditional on being able to prove financial hardship to prevent abuse and it is important tenants and landlords work together during this uniquely difficult time.
“What is important is that the government doesn’t effectively payout twice.”
Bowring’s remarks are baffling in two respects as the comments show a deep rooted ignorance of what is being discussed:
1. How is the Government “paying out twice” (they are not paying 1p towards deferred mortgages – landlords are not getting any real financial assistance, just a ‘promise’ that they can borrow more money)?
2. Why are tenants NOT covered by the Government initiatives (as I’ve said before, only tax dodgers and people like landlords are not being covered)? I can understand payment delays, but fail to understand how this might translate into a rent reduction…
Lastly and generally, why should tenants rents be kept below a third of their income in a time of crisis if they can pay? This is especially if the landlord’s income can barely stretch to meet all obligations. What does Bowring think landlords do with any rent profits they MIGHT make? I wish I had two-thirds of my profits to play around with (after all, my rental profits are my income) – what an absolute luxury that would be!
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Bravo!
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The poor love seems confused as she seems to translate a mortgage defferal payment for a landlord into a rent reduction for a tenant.
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I would say its not just Landlords and tax dodgers.. I started my electrical company 2 weeks before the lockdown and had my final electrical exam booked for around now so was all ready to start earning money.
That has now all gone on hold, because I get rental income and have already claimed contribution based JSA (used it to retrain). I am left with nothing. Im thankfully not on the breadline and am actually an example of someone that cannot afford to give my tenants free months of rent as its my only income at the moment.
But my point is people that have just started up in the last year or so have been completely left hanging, I understand why, the only way forward is for struggling tenants to open a conversation with their landlord and for us as landlords to help in any way we can, remembering its a business decision, you cant evict right now so some rent now with a hope that they will pay later may be better than no rent.
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The government needs to make a direct payment to tenants either as a grant or loan if eligible – it’s that simple.
All these stupid schemes the goverment have are just not working – its just confusing the sh** out of everyone.
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Surely it would make more sense for the Government payment to be made direct to the landlord, to ensure that it is actually used for rent as opposed to any other purpose?
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Agree – Direct to landlord would be even better.
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Bowring are completely out of touch.
Landlords have been offered zero and many are in a worse situation than tenants.
If I had popperties with this group I would be looking to move else where.
Do they not understand the pressures landlords are facing.
Companies like this damage and cause more grieve to a sector which is constantly under attack from government.
Do they not know about section 24 and the number of landlords leaving the sector as its now unviable and many face bankrupcy.
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There is no payment holiday for landlords or tenants only a deferral scheme. The use of the misleading term “payment holiday” used by government, tenant groups and so called housing charities helps no one and is intentional obfuscation introduced by a bunch of politically mInded jerks. A kind of fake news to use an Americanism. This mist of confusion helps no one and unsettles and confuses many and causes nothing but anger at a time where everyone is under stress.
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So let me get this right, a tenant goes out and buys a new £1500 mobile phone and then does not pay their landlord any rent for 2 months. The tenant then demands that the landlord applies for the 3 months mortgage holiday with their lender to cover the lost rent due to the tenant buying the mobile phone, so the landlord becomes the unofficial private banker for the tenant who has in effect extended a £1500 loan to the tenant and is now legally only allowed to charge a maximum of 3% interest to the tenant due to the tenancy fees ban. Interest rates are very good at the moment but the landlord MAY be paying more than 3% interest to their lender especially when you factor in the compounded interest charged over many years that it may take to pay back this 3 month mortgage deferment. So we now pay a higher interest rate because the tenant has bought a new mobile phone! The final insult to a landlord has to be where the landlord is a higher rate tax payer with mortgage payments and due to Section 24 Mortgage interest relief restriction we will now be paying tax on the extra interest charged by the so called mortgage holiday, So not only are we paying interest on the tenants debt but we are also paying tax on the interest of the tenants debt. LOVELY!
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Agree if you substitute 65 inch television for mobile phone. Found the packaging for two such devices in the communal bins for my block of flats. Of course the mobile phone packaging may just be too small to spot.
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