Growing numbers of tenants are falling behind with their rent as coronavirus hits jobs and incomes, but it is up to their landlords to decide whether they will delay or reduce rent payments.
According to consultancy Remit Consulting, which looked at data from six property management companies, tenants were only able to pay 44 per cent of what they owed to landlords during the first few days of April 2020, with many of these facing financial hardship.
Here, OnTheMarket looks at what options there are for tenants finding it hard to keep up with their rent.
Is there a payment holiday option for tenants like there is for mortgage holders?
While homeowners have the option of taking a three-month mortgage payment holiday thanks to government measures introduced to provide financial support during the pandemic, tenants can only take a rent holiday if their landlord agrees to it.
Landlords can apply for a three-month mortgage payment holiday on their buy-to-let mortgages and are encouraged by the Government ‘to take a flexible approach’ towards tenants who are struggling to make ends meet.
If I can’t pay, can I just stop paying my rent?
If you don’t think you’re going to be able to pay your rent due to financial hardship caused by coronavirus, get in touch with your landlord as soon as possible. Don’t stop paying your rent without speaking to them first.
If they can apply for a mortgage payment holiday, they may agree for you to take a temporary break from payments. However, you will usually be expected to make up any missed payments afterwards, which may mean steeper monthly costs.
What if my landlord can’t give me a break from my rent?
If you’re unable to negotiate a rent holiday with your landlord, ask if they might be prepared to lower your rent temporarily to a level that is manageable for you.
During this difficult time, most landlords would usually prefer to receive some income from their property rather than nothing at all and they’re also likely to be keen to hang on to good tenants.
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It also makes sense to look at ways you might be able to reduce your other outgoings so that you can afford your rent.
For example, some councils are allowing people to pause council tax payments for a few months, and credit card and loan companies must offer a three-month payment holiday for customers who are struggling financially due to coronavirus.
Am I eligible for any financial support?
The Government has announced a range of measures to support those facing a drop in income due to coronavirus, although unfortunately there are some people who won’t qualify for this support.
Many workers have been furloughed by their employers, which means they continue to be paid even though they’re unable to work.
These workers should receive 80 per cent of their salary up to a maximum of £2,500 a month, while the self-employed who meet certain eligibility criteria can apply to have 80% of their income up to £2,500 a month covered by the government.
If you don’t qualify for either of these schemes, you might be eligible for Universal Credit, which is a means-tested benefit to help you cover your living costs.
Find out more about Universal Credit and how to claim at gov.uk
Can my landlord evict me if I can’t pay my rent?
Under recently introduced emergency legislation landlords in England and Wales have been banned from evicting tenants for at least a three-month period.
At the end of this period, the government says that landlords and tenants ‘will be expected to work together to establish an affordable repayment plan’ which factors in their tenants’ individual circumstances.
Will my landlord get a mortgage holiday if they agree to a rent holiday?
The three-month coronavirus mortgage holiday scheme announced on 17 March was just for homeowners but on 19 March, the Government extended the programme to landlords with buy-to-let mortgages.
As such, any landlords able to demonstrate that granting a payment holiday to their tenants has, or will, put them in danger of not being able to afford their buy-to-let mortgage payments, should contact their lender to apply for a payment holiday as soon as possible.
Many lenders now have online application forms that can be filled in rather than requiring customers to wait on the phone. If the landlord can prove hardship because of the reduction in rent coming in, they may well be granted a mortgage payment holiday.
UK Finance, the trade body representing the business and finance industry, says lenders have been instructed to take a ‘flexible’ approach to such requests.
Can my landlord evict me if proceedings had already started?
From 27 March, eviction proceedings have been suspended for a 90 days. This means that even if your landlord has already issued you with a possession notice, they are not legally allowed to evict you until the end of June.
OnTheMarket has a dedicated page for coronavirus information and advice.
