Renting During Coronavirus: What You Need To Know
Chris Evans, head of specialist mortgages at Pure Commercial Finance says…
If anyone is in a position where they feel they will not be able to pay their rent, they should first speak to their landlord and explain their position. Making arrangements for some sort of payment plan would be a good start and it’s important to document any agreements so they can be referred to in the future if required. It’s also important to speak to Citizens Advice as they could assess if you are entitled to any benefits if your circumstances have changed.
Payment holidays on rent are helpful, but you will still need to repay any payments missed during this period. There is a growing concern that tenants will rack up rental debts that they are unable to repay once lockdown is lifted, which will inevitably lead to evictions in the future, which is something the government is currently looking into. Currently, where a tenant has entered into a payment plan with their landlords, they will need to prepare for the time that their rent will become payable in full, with the addition of the payment plan contributions. Over time if payments are made, they should bring themselves back up to date.
It is in a landlord’s interest to look at flexible payment plans to minimise their own losses during a difficult period for both themselves and their tenants. That being said, it’s well worth a visit to the Citizens Advice website for a full breakdown of what your rights are.
Each landlord will have their own set of circumstances to consider. If they are in a position where their tenant is able to maintain payments and they aren’t at risk of financial loss, the advice would be to continue as normal. However, if their tenant is unable to pay, they can limit their losses by instructing their payment holiday and by setting up flexible payment plans with their tenants. Not only would this reduce their losses, but will also reduce the overall rental deficit, so in the long run the landlord will have improved chances of reconciling if the debt is lower. It would also improve the relationship between tenant and landlord.
The government introduced a ban on evictions at the start of lockdown, which has recently been extended by a further two months. It gives tenants some extra breathing space if they are in a position where they can’t afford to pay their rent. No eviction hearings will be heard at the courts until the end of August. This applies to private and social sectors.
If you’re looking for a new place to live, viewings can still be carried out in England at the moment. Generally, the house will need to be empty, with all doors left open, and involve minimal contact with surfaces in the properties. Ideally, the estate agent showing you around will ensure that it is safe for you to be at the property. Many estate agents are staying outside the property while you view for the sake of safety. There has also been a massive increase of virtual tours, so clients don’t need to go on site at all.
Demand for rentals has not waivered at all. A lot of people that needed to rent before the lockdown still need to. What the lockdown has created is a bottleneck which means landlords suddenly have plenty of applicants for their properties. Once this initial wave of demand has been serviced, there may be a delayed slump later in the year if a recession hits and unemployment rises.
In areas where demand is still high, there will be less room to negotiate on price. If a property has been on the market a long time without any interest, it’s here that there might be room for a deal.
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David Alexander, joint managing director of digital property management platform Apropos says…
Virtual viewings are undoubtedly the biggest change the rental property market has seen as a result of coronavirus. They have completely taken the market by storm and were not previously considered. During lockdown, we have successfully secured a substantial number of tenants who haven’t visited the property and have been through the whole process without making human contact. As we ease out of lockdown, virtual viewings will remain – however, for those that still prefer to view in person, social distancing will be maintained until we are otherwise advised by the government.
Anyone looking to delay rent payments should immediately make contact with the landlord or agent and explain your position. Every landlord is different and there are a number of options to find a resolution, whether that’s reducing rent during this period of uncertainty, or the option of paying less at the moment and perhaps more in the future. The most important thing is to communicate – most landlords or agents will be understanding and help you through this difficult time to find a solution that works.
During negotiations, consider how you will repay any rental arrears in the future. There is no point in overpromising – it may be that you are able to pay arrears accrued over three or four years. A longer-term repayment is likely to be more sensible, as your situation might get worse before it gets better.
During this time, there is a complete ban on evictions, and you will not be evicted if you cannot pay rent. In England and Wales there was an initial three-month ban which has now been extended by a further two months up until August. In Scotland, there is a six-month ban on evictions. It is therefore extremely unlikely that any landlord won’t be sympathetic to the current circumstances.
Right now, no one is in the position to be implementing rent increases when it comes to extending or implementing new tenancy agreements. If anything, it’s likely the landlord will be doing well if they can get the same rent as before this lockdown period – especially when there are a lot of properties on the market. If a landlord attempts to raise the rent, ask them if they would instead consider extending the tenancy at the current rental rate.
There was a slump in demand during the early stages of lockdown when no one was able to do anything. It took a while for virtual viewings to take off and initially the demand wasn’t there. However, we have since seen a big uptake for rental accommodation in the last few weeks with substantial demand for those seeking a property with accessible outdoor space or a garden.
The rental market is all about supply and demand; up and down the country rental properties are in high demand, although there are a lot of properties currently on the market. There may be room to negotiate on the rent, however this largely depends on the region and the landlord on a case-by-case basis. It’s true that the quality of tenant is often the secret to a good tenancy.
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