The Coronavirus has changed and impacted every aspect of our lives for the last 10 months. With further lockdown restrictions in place across the UK, and the vaccination programme being rolled out, the end is (hopefully) insight. But how has the pandemic affected the rental market? And specifically, what has changed when it comes to being a landlord?
The good news from all of this is that the property market has remained open and several measures have been put in place to help landlords during the pandemic.
Mortgage and rent payment holidays
At the very beginning of the first lockdown, a three-month mortgage payment holiday was introduced by the Government to help homeowners. The measure, announced by the Chancellor, was extended to tenants who were struggling to afford rent payments. It was also extended to Landlords, recognising the ‘additional pressures the virus may put on landlords’
New LHA rates
On 20th March 2020, Chancellor of the Exchequer Rishi Sunak announced that Local Housing Allowance (LHA) rates for housing benefit will be increased. The LHA rate is the maximum amount of housing benefit that a private renter can claim to help pay their rent. With many more people losing their job or being furloughed due to the pandemic, it comes as light relief with many charities and associations claiming that these measures do not go far enough.
CJRS/The Furlough Scheme
The Coronavirus Job Retention Scheme (CJRS) or furlough scheme was introduced at the start of the pandemic to protect jobs across the UK. According to figures released by the Government, the CJRS scheme has protected 9.6 million jobs across the UK with more than one million businesses accessing loads to help them through the crisis.
The scheme was further extended until the end of March 2021 with Business Secretary, Alok Sharma, claiming “While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.” “Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”
In a joint statement from The Residential Landlords Association and the National Association welcomed the extension “We warmly welcome the announcement by the Chancellor. It will give tenants and landlords much greater confidence that rents can be paid through the ongoing crisis, which is preferable to deferring rents through rent payments holidays.”
Ban on Evictions
Housing Secretary, Robert Jenrick, announced in August 2020 an extension to the ban on evictions by 4 weeks. The ban means that landlords in England would be required to provide tenants with 6 months’ notice, except in cases involving issues such as anti-social behaviour and domestic abuse. Further measures were brought into force on January 11th 2021 and extended the measures remain in place for six weeks.
Changes to Stamp Duty on Buy-to-let properties.
During the pandemic, the Government introduced a temporary change to stamp duty rates which extended to 31 March 2021 in the hope to stimulate the market further. The new measures could help new buyers saving thousands of pounds. In England and Northern Island, people buying a buy-to-let property or second home need to pay a 3% surcharge on the standard stamp duty rates. There are several exemptions in place. For more information, see https://www.gov.uk/stamp-duty-land-tax
There is growing pressure from rental associations that more needs to be done to support landlords during and beyond the pandemic.
As always, we recommend keeping in contact with your tenants. Sometimes, knowing you have someone on your side is a great reassurance. Working with tenants to find a resolution can work in everyone’s best interest.
If you find you need further advice, then our Landlord Insurance Specialists are on hand to help and advise you when you need it most.
For all the latest updates and advise, UK Government: https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities
National Residential Landlords Association https://www.nrla.org.uk/
The information is current and correct as of Thursday 4th February 2021