The three-month payment holiday for mortgage borrowers has now been extended to tenants and buy-to-let landlords.
This means that if tenants in either social or private accommodation are struggling to pay their rent due to coronavirus they can speak to their landlord about a payment holiday for up to three months.
Likewise, landlords with buy-to-let mortgages can arrange a payment holiday with their lender if their tenants are unable to pay the rent.
In addition, no one can be evicted from their home or repossessed during the next three months.
At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
Mortgage lenders have to abide by a ‘pre-action protocol’ on repossession proceedings for homeowners and this is to be extended to include private renters.
The government says this will support the necessary engagement between landlords and tenants to resolve disputes. Landlords will be expected to contact tenants to understand the financial position they are in.
In order to help landlords, the government will issue guidance on how landlords can help tenants who are affected by this to remain in their homes wherever possible.
The National Housing Federation and Local Government Association have welcomed the new support for social renters and made clear that no one should be evicted because of the coronavirus.
Home buyers who have used the government backed Help to Buy equity loan scheme will be offered interest payment holidays if they are struggling to pay due to coronavirus.
Housing Secretary Robert Jenrick MP said: “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.”
Landlords welcome the payment holiday
The Residential Landlords Association and the National Landlords Association both welcomed the news: “Our priority is to ensure that tenants are secure in their homes during this crisis.
“The three-month buy-to-let mortgage payment holiday will take a lot of pressure off landlords enabling them to be as flexible as possible with tenants facing difficulties with their rent payments.
“No responsible landlord will be considering evicting tenants because of difficulties arising from the current situation.
“There does need to be some flexibility though such as with dealing with a tenant engaging in anti-social behaviour. This could cause misery for fellow tenants or neighbours especially when they are going to be spending a lot of time together.
Mortgage lenders willing to help
Nationwide, via its buy-to-let arm The Mortgage Works is the UK’s second largest buy-to-let mortgage provider.
Henry Jordan, director of mortgages at Nationwide, commented: “We feel it is important to extend protection to landlords and their tenants during this uncertain period.
“We have extended mortgage payment holidays to include rental properties so that landlords with tenants who are unable to meet rental payments because of coronavirus are protected as much as possible.
“We would encourage tenants to speak to their landlords if they are impacted or worried about coronavirus to ensure that steps can be taken to support them at this time.”
Bank of Ireland has a range of supports in place including mortgage payment breaks of up to three months, not just for mortgage borrowers but also for those with personal loans and car finance.
This support is also available to mortgages provided by Bank of Ireland UK through its partnership with the Post Office.
The payment breaks will not affect customers’ credit files held by credit reference agencies.
Ian McLaughlin, chief executive at Bank of Ireland UK, said: “We know that the services we provide are critical during this very challenging time and we have a range of dedicated supports in place for customers.
“Customers should contact us directly if they feel they will be impacted financially by Covid-19. The safety and welfare of our colleagues and customers and the continuity of our services remains our priority.
“We will continue to play our part by working with Government and the wider industry in response to the threat posed by coronavirus.
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Does not consider landlords who are renting property as part of their pension each month.
So who helps the landlord with his pension?
‘Robbing Peter to pay Paul’
It’s all very well assuming private landlords have buy-to-let mortgages, but some landlords own property outright, but still rely on rent for income, so what are they to do if no rent is coming in? Join the realms of the unemployed I suspect? For example, I own 2 rental properties outright and have very small mortgages on a further 3. I am 61, but no sign of my state pension yet, so I rely on rent from my tenants to live. I will need to claim benefits myself in this instance. Also, something the government is keeping to itself: If you are unemployed or on a low income and live in rented accommodation, you could get HOUSING BENEFIT to pay all or part of your rent.
If you own 5 properties then you running a business and con apply for a business interruption loan.
Any LL applying for support etc will find that they open themselves up to all sorts of queries from the lender.
HMRC will be checking the data to see who is applying for assistance..
This will be one mother of an intelligence gathering operation by HMRC
They will collect enough data to keep their investigations going for years.
Only LL who have their affairs in order and are not breaching mortgage conditions will be able to apply.
So that means that Accidental LL who are fraudulently letting out their resi property without CTL can hardly ask for forbearance from their resi lender because their fraudulent tenants can’t pay the rent!!!.
Then you have all the LL fraudulently letting on short term contracts when they should be letting on an AST no longer than usually 1 year.
Can’t ask for a mortgage holiday id there are no AST tenants occupying.
There are hundreds of thousands of LL letting in breach of lender and insurance conditions..
They can hardly ask for assistance as then HMRC and others will then know.
ONLY squeaky clean LL will be able to apply for Govt assistance etc.
Many of these dodgy LL will be bankrupted unless they have sufficient resources to avoid coming to the notice of HMRC and Lender etc
Well maybe that’s fair! I pay my taxes and so should they.
I received a notice of possession just before the government announced we can’t be kicked out. I rent privately, lost my work contract December due to IR35 coming in (now extended), I’ve had to close my limited company down and now I’m on zero hours doing refuse collection and drowning in debt. Don’t feel well and have developed a cough. Where do I stand as notice says I have to vacate by 31.05.20
I am a landlord who has a buy to let mortgage I am paying interest only
My tenant can’t pay due to covit-19
If I take the three months holiday deal and don’t pay my lender will the interest be added to the loan?
Yes, the interest will be added to the loan
Hi, I’m a tenant of letting agency. I have difficulty to pay my rent due to work hours been reduced by my employer. My landlord have to pay his mortgage. That mortgage is for rent. What do I do?. Do I need to inform my letting agent.
Hi I am a landlord have a tennant already in rent arears I do not have a buy to let morrgage but need income from the property as am retired due to ill health
What help can I get
What about the landlords who live on there rental income?
I have a rental property that I had agreed a sale price on before the current situation took off. I was hoping for the sale to complete at the end of May and had planned to issue notice to the tenants next week. The tenants are on a 6 month shortold tenancy and knew the property was being sold and stated they only wanted a 6 month let.
During the sale viewings it became apparent that the tenants were in breach of a couple of conditions in the contract of which they were informed.
Earlier this month they only paid half of the rent, claiming that one of the 2 tenants was self isolating. Despite assurances and chasing they are yet to pay the balance. My buyer requires vacant possession, which under normal circumstances would not be a problem.
What help do the proposals offer me that I will be able to get the tenants to vacate at the end of the tenancy and complete the sale?
This is sensible for all concerned as we are entering uncertainty.
No is not going to affect the credit files..but is gonna affect the person who has to pay the mortgage because this sums that are not paid now are added at the end of the loan with huge interests by banks. Banks never loose. Why doesn’t the government just give the money to those people who need to pay the rent..or ask the banks not to charge the owner with even more interest at the end because of this..
In a case where the rent of a church is paid for by collections and voluntary donations by the congregation would the 3 months rent holiday apply in the current emergency?
How do I apply
You need to speak to your landlord to arrange the payment holiday and how you will pay for that going forward – maybe spreading payments over future months.
Hi I with onwards I no I want b able to afford my rent with this going on am in no arrears at the moment will I b able to apply for 3 months break off the rent
Yes, you will need to talk to your landlord to make arrangements.
what about people who pay full rent to the coucil every week like I do and loads of people do????
Kate Henderson, Chief Executive of the National Housing Federation (the trade body for housing associations), said: “No one in a housing association home will be evicted due to coronavirus. If you are concerned about your ability to pay, please contact your housing association who will want to support you.” The same should apply to council tenants so get it touch with your local council to discuss your options.
Hi,
For the rental holiday does this just mean rent payments will be delayed by 3 months but that one will still need to pay the total due so the payments after the 3 months? In which case after the 3 months one will affectively be paying double rent?
Thanks,
Steph
You will have to talk to your landlord to make arrangements for paying the outstanding rent. It could be higher payments spread out over a number of months.
There is no rent holiday available for social housing tenants. Spoke to them as husband is self employed and has no earnings. I was told they are following government guidelines. They were no help at all and instead gave vague threats about what would happen if we fell into arrears.
I am a landlord and my tenant is unable to pay rent. When looking at the mortgage works website, it says I can apply but interest may be increased. How is this helping?
My landlord is saying his mortgage company wants to see mine and my partners bank statements to prove we can’t afford the rent, is this right?
If your telling the truth you will have no problem showing the paperwork then everyone stays happy ????
My landlord have said Birmingham Midshires are in pipeline of offering buy to let payment holidays. However, when completing the form, landlord has to disclose their savings as mortgage company have said they will come to them for payment. Anyone know if this is true?
Reply to Zoe Gerrish: This is not true. You can check out the form yourself that your LL has to complete; it is all done online. Form is available at http://www.bmmortgages.co.uk – go to ‘Payment Holidays’ screen, scroll to bottom, this then takes the LL to a LloydsBank (parent company) secure screen – user is then asked a few basic questions, eg name, mortgage a/c no, how long you require hol for. Click submit, job done! (I know it’s this straightforward as I applied last week & have received notification of my hol yesterday via email). I then passed on the benefit to my tenants, as all responsible LL’s should do. Good luck with everything & stay healthy!
On my HMO property it was difficult to get good deal on mortgage, I paid it off from my all the ISA and savings. I have a large mortgage on my residential property; I depend on rents to pay for it. Additionally on HMO property I pay Concil tax, all bills, maintenance and cleaning cost.
I have got a bad tenant who in past before Corona has tried not to pay rent by using different excuses.
He is self employed, so it is not possible to prove his income He must be getting some cash.
He now has found now a legal excuse to not to pay rents.
Keeping in mind huge mortgage on my residential property, all bills and cleaning etc, I am in a very bad situation. I think some others would be in a similar situation.
I would like to hear your views on this.
Hiya , how does this work if we as landlords are providing holiday payment to the tenants . For example if they used to pay X amount as rent and can now afford to pay only Y amount . Will the tenant need to pay the remainder of the payment (X-Y) in future (after 3 months ) ?
If so do we need to have any agreement done between tenant and landlord ?
What exactly does this rent holiday mean, it does not seem very clear, it did when the chancellor said what was happening, but it does not seem as straightforward as it sounds. Do social housing tenants, get this also, i was already struggling before this pandemic, and this has caused me more arrears, i have managed to find a job, not started it yet, as i have had to have training, had to pay out extra money for DBS and to keep my car on the road to be able to do the job, i have to work a month without money, until i get paid, i have to put petrol in my car, i have literally struggled to do all this, and had to go without food to keep my car going, which i have not used a lot, as i cannot even afford to put much petrol in it at all, only just used it, before the pandemic, when i had to go somewhere. This pandemic has caused problems all round, for me and lots of people, i think everyone should be compensated for this, this is not helping anyone, by giving them a mortgage or rent holiday, how are people going to pay it after three months, if they are not working. In other countries, they have done things to help their people.
I am a private tenant, I can still afford my rent payments, but I know my landlord has been accepted for the mortgage holiday, do I still pay rent eventho he is not paying his mortgage?
You should pay the rent. It will still be owed even if the landlord agrees to a payment holiday so you will only end you having to pay it further down the line. It could also affect your credit score if you stop paying.
All This help the government says they are giving us during these sensitive times ( COVID 19) is nothing more than allowing you to get into more debt if and when this virus lock down etc is finally over with the government will be quick to take back what they have lent out . Rent Holidays should be rent free for at least 3 months and nothing to pay back or add on because of it. also council tax should be no payments for 3 months as well or allow if they still insist on making payments allow rent, council tax, and gas and electric to be paid at a significantly low amount such as £10.00 until the present situation has been resolved.
Especially those persons who work in the care industry and nhs hospitals as they are more at risk than other individuals Care staff who work in Residential Care homes or Carers should be treated the same as the NHS.