One of the lettings sector’s biggest trade bodies is calling on government to make a clear statement to help landlords who are facing campaigns for an end to any rent payment during the Coronavirus crisis.
The newly-formed National Residential Landlords Association - the merged group coming from the National Landlords Association and the Residential Landlords Association - says “more and more” members are saying tenants are under the impression they no longer have to pay rent as a result of the pandemic.
The association is now asking government to clarify its guidance; that rents should continue to be paid where possible.
Some tenants believe that because lenders have provided the option of a three month mortgage payment holiday to landlords, they should not pay rent for this period.
Groups including the National Union of Students are also campaigning for rent breaks for tenants.
The NRLA says it believes flexibility is necessary but is demanding the government publicise its guidance that tenants must still meet their legal and contractual obligations where they can - including paying rent - to dispel any myths.
“The mortgage repayment holiday is only available for landlords who are struggling to make their payments because their tenants are unable to pay part or all of their rent as a direct result of the Coronavirus and through no fault of their own” says NRLA chief executive Ben Beadle.
“It is not an automatic payment holiday and landlords who successfully apply still have to make these payments later on. It is not a grant” he continues.
“What it does allow is that where a tenant is having genuine difficulty in meeting their rent payment because of a loss of income, landlords have much greater flexibility to agree a mutually acceptable plan with the tenant to defer the rent due. This is not a green light to tenants everywhere to stop paying their rent.”
He says that given 94 per cent of private landlords rent property out as individuals and 39 per cent have reported a gross non-rental income of less than £20,000, many depend on the extra rental income for their livelihood.
The NRLA has called on landlords to show as much flexibility with tenants as they are able to within their means and has been heartened by the many stories showing tenants and landlords pulling together at this difficult time.
This has included landlords offering properties rent free for NHS workers where they afford to do so.
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I have a tenant that paid about one third of rent due Jan feb and now it's going to be about 10months before I can get my property back.
The government has taxed landlords to the hilt in some cases tax rates of 94% due to S24.
Then we have Sdlt, 100% council tax on empty properties.
No other sector has been attacked from government like the PRS.
Not only are some tenants not paying rent even when they can, the government now expect us to house them indefinitely for free.
Yet after all the taxes landlords have paid we will get zero help.
Few tenants understand that we don't get treated as self employed by government.
The mortgage hol is a poor decision involving loads of red tape. It might not on paper effect your credit score but indirectly lenders will either refuse or charge a higher rate on remortgage.
There is more than one way to skin a cat.
Many landlords will be trapped as most mortgages now are at 60% and they are asking for much more info.
ALL THE GOVERNMENT HAD TO DO WAS TACKLE AT SOURCE.
ANY STRUGGLING WITH RENT THE GOVERNMENT PAYS IT. IT COULD THEN BE RECLAIMED VIA HMRC OVER A PERIOD OF TIME.
NO INCREASED EVICTIONS NO HAVING YOGO TO LENDERS.
Seeing full time landlords live on the difference bet rent and mort just deferring mort gives nothing for the landlord to live on
Spot on Kathy.
Landlords have been withdrawing from the market ever since Osborne attacked us. Meanwhile homelessness rises. Watch this space because it's going to get a whole lot worse.
Very well put, it's the kind of message Landlord associations should have given.
Govt are Totally missing the point with the PRS ( yet again ) and No provision has been considered by Govt for the Landlords who rely on Rental income to sustain their own financial commitments. Added of course, by not all lenders are granting mortgage deferment ( not the unhelpfully worded 'holiday's used by govt and repeated by NRLA )
The NRLA are confusing the Government with someone who gives a s**t about the PRS.
NRLA, the stats quoted look suspicious, also Government have issued guidance, and watch out whats going on in Europe:
German government considers introducing no residential evictions before July 2021
Government help landlords ? Not likely .. we have more chance of getting thrown under a bus by the government over this .. probably a chance to drive a few more out the sector
Makes a change mind the landlord associations helping the landlords case .. they are more keen on helping tenants these days
They are trying to copy the government James, by giving equal 'Sound-bites' always using the words Landlords and tenants. !
Its just what Govt do, when they're about to assassinate landlords by some measure that clearly benefits tenants and is Toxic for Landlords, MHCLG say ' we have introduced measures to help landlords and tenants ' ! when actually they introduced measures to help tenants that seriously damages landlords.
The 'political game' that landlords associations play has never worked and never will !
Time to stop trying to be " Mr nice-guy " !
As LL are being stuffed by FECKLESS non-rent paying tenants LL might as well issue mass S21's.
They aren't going to be paid the defaulted rent so might as well just accept this will occur and start the eviction process as no tenant will do the honourable thing and give NTQ if unable to pay rent
Or at least offer to the LL NTQ.
LL can then determine what they might wish to do; whether to accept or not.
It is clear from this CV19 crisis that there are millions of feckless tenants.
It seems hardly any tenants have built up financial resilience and are now poncing off the LL finances.
Surely it WASN'T beyond the intelligence of these thick feckless tenants that they may need resources over and above their normal incomes should it ever be required if they wished. Their income was clearly never guaranteed unless they are in Govt or Council jobs.
So why haven't these feckless tenants made provision for such circumstances!!??
Of course these feckless tenants know they can take advantage of effectively free accommodation as the referencing system is so useless and Civil Recovery impossible as Govt won't let LL know where their absconding feckless rent defaulting tenants have gone.
Consequently these feckless tenants will be able to source other rental property of which there will be lots more coming to market as a consequence of the collapse in the short-term lettings market.
LL have little alternative than to return to the AST lettings market where many will be clobbered by S24 which could well bankrupt them!!
Many LL are now between a rock and a hard place.
LL will receive NO financial assistance from Govt.
Govt actions have ensured that LL will be victims of feckless tenants.
Tenants know that they can stop paying rent now and it will then take over a year to ultimately evict them.
These feckless tenants will then move to the next mug LL who won't carry out full DD so desperate will they be to have their properties tenanted.
LL will be losing billions over and and above the £9 billion that tenants already cost LL annually; mostly in defaulted rent.
Of course there must surely be a knock-on effect on LA.
I can see many LA having to shut down or amalgamate to survive
Paul, whilst the current situation is not one that could have been readily planned for, but being a landlord in broad terms is an activity that comes with risk. Rent can rise, rents can fall, prices can go up and prices can fall. Tenants can default on their rents and Government may change or alter the tax treatment of any particular investment in any particular asset class.
Yes Paul,
But landlords would need to act in a Co-ordinated way - something that the Govt know is highly unlikely, given only 2% of Landlords belong to a landlord Association.
If, and its a big IF landlords did carry out some mass collective action, such as only taking tenants with a Guarantor, or Issuing Sec 21's before the Govt stop them, then we could force the issue to prominence.
@mark wilson
Yep I fully accept everything you state about business risk.
However LL are the ONLY business that is FORCED BY LAW into provide FREE accommodation.
Of course LA are as much a victim of these circumstances as well.
LA depend on LL for their survival.
Of course most LL appreciate the risks they are running but the way they carry on you wouldn't think so!!
I have always considered being a leveraged LL is a very risky business.
It is very easy to be glib and state that any business could face disruption to it's business model and plan accordingly.
If that was a common response very few businesses would start up!!
It is simply IMPOSSIBLE to plan for all future eventualities
Nobody could have predicted S24.
Politically it will never be done but being a LL would be far less risky if you could boot out a feckless waster rent defaulting tenant without any Court action required after 2 months rent default.
That means with Police assistance if necessary the tenant is removed by the LL or LA from the property on the 2nd day of the 2nd month as 2 months of rent default will have occurred.
That would save £9 billion in losses for LL and would also mean the tax take from LL would increase.
Lost tax on £9 billion is quite a lot!!!
I am unsure as to whether many LL do truly understand the business risk of the current dysfunctional eviction process.
I know when I started out I didn't even know what a S21 or S8 was!!!!!!!
I thought you just invested in a property and let it out to rent paying tenants.........................................Doh!!!!!
Soon learned the errors in my understanding!!!
At such a cost that I will NEVER make a profit as long as I live!!!
So I am getting out of the AST letting sector mindful of everything you have stated.
Feckless tenants and the current dysfunctional eviction process can seriously damage the finances of LL.
Something I only appreciated in later years.
Better late than never I suppose!!
I believe there will be a flight to quality tenants.
I certainly won't even be considering anyone in the hospitality industry.
Only those who are guaranteed to receive their full wages if another similar CV19 crisis hits will be considered.
It even makes feckless DSS tenants a better prospect that normal hard working people.
Such FECKLESS wasters are guaranteed to receive their full WELFARE wages!!!
Work or no work!
I've LONG been saying.... organisations like ARLA and the NLA (as it was) and no doubt the NRLA as it now is are TOOTHLESS and FECKLESS organisations feathering their own nests with fees for members and selling them branded trinkets and training courses whilst doing virtually NOTHING but occasionally politely grumble in a mild, cautious and apologetic way while the government clearly doesn't take them (or us) seriously, listens to lobbying groups (pretending to be charities caring about homelessness) like Shelter etc. and "Generation Rent" and of course ignoring our representatives and continuing to walk all over us and crush us.
It is very wrong we should have allowed this to happen at all let alone year after year.
Our professional bodies need to become MILITANT and actually work HARD for us with strong and innovative initiatives that MAKE US STRONG AND A VOICE TO BE HEARD, LISTENED TO & TAKEN ***VERY*** SERIOUSLY.
They should be doing things like (but NOT ONLY) organising long term mass TAX STRIKES (for agents AND landlords) on a HUGE SCALE that the government simply can't ignore, and they should very clearly explain why we're doing this and that we'll do it again and again each time the government fails to listen to us or take our views or livelihoods into account.
Another example of something we could do is MASS EVICTIONS!
The way this could work is that many thousands of landlords, ideally like us with reasonable "portfolios" each, and agents for everyone else, should simply serve EVERY tenant in EVERY property a valid s.21 notice (even if they moved less than 6 months ago you should be able to end their tenancy in the 7th month provided you have a well written AST).
Pathetically and counter-business we are no longer allowed to evict in "retaliation", e.g. if they turn out to be hell as tenants and cause us a lot of unnecessary trouble, but I believe (but haven't investigated) that we CAN carry out "revenge" evictions in response to government legislation or stupid statements telling tenants they don't need to pay rent or whatever.... and we should then heavily publicise (via our currently rather feeble bodies who all need to shape up and start being militant ion our side as I said) to explain what we've done and exactly why.
The s.21 will have at least 2 months to run and during that time the government can negotiate with us and back down or reverse whatever latest pathetic thing (or past pathetic thing we chose to deal with) that they have done.
If they don't they'd have to accept we've exercised our right to empty all of our properties for a month - a price worth paying, particularly because I bet that within a few weeks we'll win and NOT have to pay it!!!!
Imagine if the government did nothing and we started log-jamming the county courts with THOUSANDS of possession claims, while vast numbers of tenants would have no where to live as so many landlords would be token-evicting everyone and no offering their properties to anyone of the desperate people looking?!!
We could politely explain to our desperate and terribly upset tenants why we need to do this and politely ask them to explain that to Shelter etc. and ask their MPs to consider our livelihoods and start treating us a little more fairly, maybe even more favourably like their other favourite business sectors!!!
Anyhow, I have other ideas too. Those are but a couple of them. All this needs proper expert investigation and planning to work successfully and not make things even worse for us.
THEN we might actually start to be noticed, taken a bit more seriously, have our rights respected and treated slightly more fairly.
Completely agree Barry, ARLA are a complete waste of space, they could have done so much more to prevent rip off tenants fees, instead of waiting for the government, they could have instructed their agents to cap their fees or lose their accreditation, they should have insisted on independent Inventory checks years ago, none of this is rocket science, yet they cannot even foresee these problems. The next scandal is going to be the flogging of non deposit policies which are just a complete rip off, yet ARLA does nothing to stop them.
Thanks Richard :)
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