An online lettings agency says landlords should take up mortgage holiday offers and be willing to accept reduced rent during the Coronavirus crisis.
Boris Drappier of Bristol-based online agency Rent Happily says tenants who have lost their income are likely to accumulate rent arrears, and adds: “Some people will need to move places to start new jobs, but their outstanding debt might prevent them from securing a new place to live in, trapping them in a vicious cycle and further decreasing their chances of being able to pay their rent, let alone rent arrears.”
He adds that: “Unless preventative action is taken, once the eviction moratorium is lifted, the courts will be flooded with cases and proceedings will take years to succeed, if they are successful at all. In the middle of a crisis, getting new tenants with clean credit records may prove difficult, making it hard for the landlord to meet their mortgage payments in the meantime.”
Drappier urges landlords to take up mortgage holidays and then pass the benefit on to tenants - and not to expect other arrears to be paid at a later date.
“Rent arrears repayment plans should only be suitable for the share of the rent that is not covered by the mortgage holiday … or for the full rent when there is no mortgage at all” he says.
Although landlords who secure mortgage holidays have to extend their repayment terms - so the holiday is simply a deferral rather than not paying at all - Drappier insists any landlord who didn’t have to pay their mortgage now and still received rent “could end up getting that money twice.
Writing on a Bristol community blog, the agent says: “Some of the landlords we work with have given a blanket three-month rent relief, while others prefer a monthly renewable agreement, but the results are similar; our landlords are confident their tenants will come through the crisis well and pay their rents afterwards, and our tenants are committed to honouring their rent, because they know they are being looked after.
“True, landlords have the right to their rent arrears, although given the circumstances, they are unlikely to get them back, and they may face even greater costs finding new tenants, in a rental market that might become very insecure. Taking out a mortgage holiday and passing on the benefits to tenants is not charity, it is simply good business sense.”