Sheards Accountants has collated helpful advice on how landlords can put plans in place should the unfortunate and unexpected arise. 

Many landlords across the UK are facing the uncertainty of whether tenants will be able to keep up with rental payments as a result of the Coronavirus pandemic. Some support has been offered by the government, through extending the three-month mortgage payment holiday to buy-to-let mortgages.

1.

Speak with your tenant

There is nothing worse than not knowing whether or not your rent fees will be hitting your bank account to meet your mortgage obligations, which is why the first thing you should do is contact your tenant to ask how they may have been impacted by COVID-19 and how that might impact their ability to pay their rent.

Compassion should be shown at this time, everyone is facing increased pressures as a result of the COVID-19 pandemic so consider the way you approach the question. Showing compassion is likely to result in a better outcome all round if an amicable agreement can be reached.

2.

Contact your mortgage lender

If you believe you may struggle to meet your mortgage repayments, or if your tenant has indicated that will struggle to pay, then contact your mortgage lender at the earliest opportunity to secure a mortgage payment holiday.

Most mortgage lenders are in the process of setting up the ability to make this request online in order to avoid lengthy call centre queues, so check online in the first instance.

Remember that interest will still accrue on the outstanding debt so you may end up paying more interest over the period of your loan, but with current interest rates, this should not have a significant impact.

3.

Find a better mortgage deal

Following the announcement that the Bank of England has reduced its interest rates to a record low of just 0.1%, it may be the time to switch lender. However, if you need to take advantage of a mortgage holiday you will need to discuss this with them at the time of application to check it will be honoured.

Alternatively, if you’re out of your fixed term or are nearing the end, speak with your existing mortgage lender to see what better rates they could offer.

4.

Act lawfully

New legislation prevents any new evictions from social or private rented accommodation during the COVID-19 emergency. While this will come as a relief to the 4.4 million privately rented households in England, it will likely to be of concern to landlords who are limited in their ability to deal with bad debts, especially if these may have been in place for the past couple of months.

Outlining the new legislation, Sheards tax manager, Jane Senior explains: “This means that no action can be taken by the landlord if the tenants can no longer keep up to monthly payments due to being made redundant or becoming furloughed. The legislation includes advice for landlords to show compassion during this time, and to support those who rely on rent as a stream of income, buy to let mortgages are now included through the mortgage payment freeze, to help reduce their costs and take the burden off them.

“The guidance recommends that all tenants that are concerned about payments and have found themselves in unfortunate circumstances should speak to their landlord to arrange a plan moving forward, either with a more manageable monthly payment or a rent holiday”.

5.

Set up a savings pot

If you’ve not done so already we recommend setting up a standing order to a savings account to ensure you have a pot of funds to revert to in times where extra spend might be required on your rental property, whether it be to cover mortgage repayments or essential repairs.

If you do take advantage of the three-month mortgage payment holiday, we would recommend putting that money into this account if you don’t need to use it for essential living costs, so that you have some longer-term financial protection should the tenant choose to move out during this period.

Source: PropertyWire

Nearly half of Londoners are living in rented accommodation and this will surely increase according to study.

On the basis of current trends, the Centre for Housing Policy at York university estimates that by 2040 up to one-third of 60-year-olds will rent privately. Government data show that at present just 4 per cent of pensioners and 8 per cent of those aged 55 to 64 live in privately rented accommodation.

The proportion of 25 to 34-year-olds who rent privately has been stable at about a third over two decades but has risen notably for 35 to 44-year-olds, from 16 per cent to about 25 per cent now. Young people also spend more on housing costs (a third of their income on average, the Resolution Foundation reports) than did youthful baby boomers (a fifth) and the rent they pay will often go directly to the pension income of their retired landlords.

The UK’s housing market will undergo a “modest correction” if the country leaves the European Union without a deal, with the biggest fall seen in London, a Reuters poll has predicted.

The survey of 25 market watchers conducted last week forecast that in the event of a no-deal Brexit, prices would drop nationally by 1%.

The correction would be most exaggerated in London’s overvalued market, where average prices could fall by 3% in the six months after the 29 March, if the UK crashes out.

Click below to see the article from PIN.

PIN August 2018 P09 Analysis House Price Growth

London house prices are falling at the fastest pace since the depths of the recession almost a decade ago, with the capital’s most expensive areas seeing the biggest declines.

According to Acadata, average prices fell to £593,396 in January. An annual decline of 2.6 percent, that’s the most since August 2009.

Mayor of London Sadiq Khan has given the go ahead on the final plans for a new £1.4 billion Westfield shopping centre in Croydon.

Croydon Council approved the plans back in November, but because of the scale of the scheme Mr Khan was given the final say.

Mr Khan said the shopping centre, which is a joint venture by Westfield and Hammerson, will “unlock Croydon’s potential”.

One in four properties bought in the third quarter of this year was a second home or buy-to-let, according to Government statistics released today.

For the first time, official data revealing the precise proportion of homes sold to investors or second home-buyers is available thanks to the stamp duty surcharge applying from April.

The willingness to lend against UK commercial property will not be impacted by the result of the UK’s decision to leave the European Union, according to the latest instalment of the Cushman & Wakefield European Lending Trends report.

The fourth edition of the Cushman & Wakefield report released today is based on survey responses of 50 major, active lenders from across Europe and considers views on recent activity as well as trends expected over the next six months.

The Bank of England has cut interest rates, taking the base rate to a new low of 0.25%. This is the first cut since March 2009, and how welcome it is will depend on your financial situation. The Bank also announced a new round of quantitative easing (QE) – pumping money into the economy to buy government bonds.

The UK housing market is set for a decline in sales as buyers “wait and see” what will happen after the Brexit referendum vote, according to property experts.

It has been suggested mortgages could be more expensive and harder to obtain as lenders plan to tighten controls on lending during the period of uncertainty.

The London property market is expected to be the hardest hit after demand outstripped supply forcing prices to skyrocket.