Posts with tag: rent payment holidays

Labour Calls for Rent Payments to be Scrapped During Pandemic

Published On: March 31, 2020 at 11:15 am


Categories: Tenant News

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Labour is calling for private tenants to be exempt from paying their rent for three months if they have been affected by coronavirus.

A report from Shadow Chancellor John McDonnell, states that many renters are being “driven to destitution” as their wages are cut by 20% during the coronavirus outbreak. 

“Where necessary rent payments should be suspended for a three-month period to enable people to feed themselves and their loved ones, and to avoid driving people into destitution,” the report says.

“At a time of widespread job losses and wage cuts of at least 20%, it is not unreasonable for landlords, many benefiting from a mortgage holiday, to prepare for small declines in their regular income.”

Labour believes that the government is not doing enough to protect tenants. Currently, landlords can’t start eviction proceedings for the next three months, in order to ensure that renters do not have to worry about losing their homes at this time. 

Conservative MP and Housing Secretary Robert Jenrick said earlier this month: “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.”

However, Labour MP and Shadow Housing Secretary John Healey said: “This legislation does not stop people losing their homes as a result of coronavirus, it just gives them some extra time to pack their bags.”

He went on to state that this would be no different from the homeowners and landlords that have been given three month mortgage holidays.

“Coronavirus is a public health emergency. It need not become a crisis of housing and homelessness too. But this will happen if the Government continues to refuse to take the most basic steps to keep people in their homes.”

Robust payment systems crucial for BTL mortgage and rent payment holidays

Published On: March 27, 2020 at 9:28 am


Categories: Finance News

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Plans for payment holidays have been announced by the government for buy-to-let mortgages and rent contracts due to the financial uncertainty caused by the spread of coronavirus. As such, letting agencies must have robust rental payment and record-keeping systems in place, says lettings payment automation provider PayProp.

It says that agencies can provide peace of mind to customers by having the ability to implement and track changes to payments. PayProp has shared the following advice:

Tenant payment holidays – what to consider?

No official guidance has yet been provided by the government. However, many landlords are likely to arrange their own informal agreements with tenants to reduce or defer rent payments temporarily.

It will then fall to agencies to record and action any changes to clients’ payment schedules. Doing so automatically, whilst maintaining a full and transparent paper trail, will help all parties to keep track of how much they owe or are owed.

Neil Cobbold, Chief Sales Officer at PayProp, says: “Agents will need to notify landlords if tenants come to them saying they can’t pay their rent.

“Many landlords will be open to helping their tenants during tough times. Agencies can play their part by organising payment changes seamlessly so everyone knows where they stand and can prepare for the future accordingly.”

Deferred buy-to-let mortgage payments explained

More clarity has been provided to landlords by confirming that they have the option to apply for a three-month buy-to-let mortgage payment holiday.

The terms of such will be up to the landlord’s mortgage lender. Payments might be increased across the whole of their remaining term or their term extended by three months to cover the repayments.

Cobbold says: “If landlords are changing their mortgage repayment structure, they will need to factor in how their portfolios will be affected and consider any changes to their expected rental income from tenants.

“Agencies need to remind their landlords that they must actively apply for a buy-to-let mortgage holiday in order to benefit, while providing them with an update on how their incomings and outgoings are being affected.”

Have the essentials in place

Cobbold explains that, during this period of uncertainty, agencies will need to ensure that they have the basics in place to provide the best possible service.

He concludes: Letting agents will be working remotely for the foreseeable future, so they need the technology in place to offer an uninterrupted service for customers, who will be looking for stability and certainty above all else at the moment.

“Effective communication will be more important than ever, so agencies will need to consider ways to speak to clients remotely, including video call check-ins and regular updates of important information.

“As the industry waits for normality to return, agencies should also focus on their most basic duty of all – processing rent payments. This means having an effective and robust payment system in place so they can continue to receive incoming rents, pay landlords and factor in any changes to payment schedules.”