BREAKING: insurers close doors to all new rent guarantee insurance policies

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Insurers agree that government’s three-month evictions ban, closing courts and a crucial clause in the policies makes selling any more untenable.

In a shock announcement the UK’s leading insurers and brokers have agreed that they are to close their doors to new business for rent guarantee insurance.

One broker has told LandlordZONE that in recent weeks there has been a nine-fold increase in enquiries from landlords seeking this type of insurance as the private rental market has faced the Coronavirus pandemic.

But a clause within these
rent guarantee policies means it is now impossible for new policies to be
issued.

That clause requires that, for
a policyholder to claim for rent guarantee protection, they must start eviction
proceedings against their tenant.

“In
light of the current Covid-19 situation insurers and brokers are concerned
about condoning landlords who take action against tenants for something that is
totally out of the tenant’s control, a statement from the insurance industry shown
to LandlordZONE says.

“Insurers and brokers will not be selling new
insurance policies which could have an adverse effect on the lives of tenants.”

Eddie Hooker, CEO of
Hamilton Fraser, points out that existing policies also have this clause,
requiring landlords to start eviction proceedings for the cover to kick in.

Over the next two to three
months the industry will be tackling the backwash from this announcement, which
makes claiming against a rent guarantee product difficult – the government recently
revealed that evictions are to be suspended until at least June and the court
system is rapidly shutting down, which will soon make eviction proceedings impossible.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: insurers close doors to all new rent guarantee insurance policies | LandlordZONE.

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Lack of Government support for commercial Landlords?

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I am concerned that the Government has overlooked Corporate Landlords in its bail out provisions. It has effectively allowed our tenants the discretion to delay paying rents by removing the option of eviction and yet there is very little if any support financially for landlords that are incorporated.

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Repairs during Covid-19?

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Anyone know what is a landlords legal position if a tenant asks for a repair eg dripping tap, boiler problem etc during this pandemic?

I know that Local Authority repair teams for their stock social housing have been told they cannot go into residential properties.

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Coronavirus LATEST: Landlords face a new challenge as Uni students quit to go home

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LandlordZONE takes the pulse of landlords and letting agents around the UK as the decision to close universities impacts student rental markets.

Students
around the UK are quitting their university accommodation, leaving some
landlords wondering if they’ll get their rent paid for the rest of the academic
year.

The National Landlords Association (NLA) has been
contacted by many student landlords whose tenants are leaving en masse
following last week’s Government advice, as universities move remaining classes
online.

In Nottingham,
landlords fear that students leaving in their droves will refuse to pay rent.

East Midlands Property Owners Group, which represents 600 landlords in the city, says students are contacting landlords saying they’re moving back to their parental homes with some asking, ‘Do I need to pay any more rent?’

Owen Cosslett, lettings manager at Oak Student Letts in the city, believes that after a while spent cooped up at home with parents, many students will soon return, and that rent will eventually get paid.

But he
tells LandlordZONE that landlords could face a bigger problem in September. “If
foreign students don’t return and halls of residence flood the market with
cheap accommodation it would impact on rents – and the market in 2021/22 could
be a very different place,” says Cosslett.

Guarantors guaranteed?

It’s good practice for student
landlords to have guarantors arranged, who remain legally responsible for the
contractual rent if the student defaults, says Meera Chindooroy, NLA’s policy
and public affairs manager.

“We advise landlords to approach
guarantors about a payment plan in the first instance to help manage the cost
over a period that will be challenging for all,” she tells LandlordZONE.

However, in Glasgow, one generous West End landlord has slashed his rents to provide relief for struggling
students.

The anonymous Good Samaritan cut some of
his student tenants’ rents by 30% because he didn’t want to burden those
who had been hit by the double whammy of losing their university base and a bar
or restaurant job.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Coronavirus LATEST: Landlords face a new challenge as Uni students quit to go home | LandlordZONE.

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Measure to temporarily suspend evictions to apply to Welsh tenants

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The Welsh Government has agreed that measures being developed by the UK Government to temporarily suspend evictions from social or private rented accommodation will apply to Welsh tenants. Last week, the RLA called for clarity from the Welsh Government after the UK Government outlined a number of temporary changes relating to a landlords ability to […]

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LATEST: Buy-to-let mortgage holiday guidance for lenders revealed by regulator

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Advice from financial regulator the FCA will reassure landlords that their cases will be treated generously and sympathetically should they not be able to pay their buy-to-let mortgages if their tenants stop paying the rent.

The Financial Conduct Authority (FCA) has issued guidance that reveals how landlords and other borrowers should be treated when applying for a mortgage holiday.

It has also revealed that the current three-month period could be extended and that landlords already in mortgage payment shortfall can access the scheme. Also, no additional fees other than mortgage interest can be charged.

Landlords need only indicate that they may potentially experience payment difficulties during the crisis to be granted a three-month payment holiday.

The FCA has also told lenders not to investigate the circumstances surrounding a request for a payment holiday, and only need to be provided with information suggesting difficulties for a lender to qualify.

This appears to be a significant relaxation of the current rules, where landlords and other mortgage borrowers are only offered mortgage holidays unless lenders have ‘good reason, good communication and documentary evidence’ of their difficulties.

Also, the strict affordability criteria often applied to buy-to-let mortgages will not apply when lenders offer landlords a payment holiday.

“We remind firms that the requirement to assess affordability does not apply where a firm varies the terms of a regulated mortgage contract or home purchase plan solely for the purposes of forbearance or to avoid a payment shortfall,” the FCA says.

These arrangements mean landlords’ mortgages will accrue interest on the outstanding sum during the payment holiday, and therefore the FCA says borrowers should be able to choose one or two-month payment holidays as well as three.

The FCA also says that both repossession orders obtained or planned against landlords who have fallen into arrears should not be pursued until the crisis is over, “given the unprecedented uncertainty and upheaval they face, and Government advice on social distancing and self-isolation,” it says.

Read the FCA’s guidance on Coronavirus.

Read more about the mortgage holiday.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Buy-to-let mortgage holiday guidance for lenders revealed by regulator | LandlordZONE.

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Network Rail announces rent amnesty for its retail tenants

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Breaking: Retail Rents:

Network Rail has
announced measures to support its retail tenants housed in Britain’s
busiest and biggest railway stations, and right across its commercial
estate. These businesses are a feeling a severe impact on trade as a
result of reduced travel and therefore footfall as a result of the
coronavirus (COVID-19) outbreak and clampdown.

With immediate
effect the government owned rail network is cancelling all first
quarter (25 March – 23 June 2020) rent payments due from its
tenants, which is says will provide significant relief for the small
businesses who are extremely worried about the impact of the virus on
their sales.

Network Rail is also
cancelling all base rent payments for retailers in its managed
stations for the first quarter of the new financial year (April-June
2020). Retail tenants in stations would typically pay a minimum
guaranteed base rent, with an additional turnover element based on
their sales.

Network Rail says it
has something like 100 of the major retailers located in its stations
around Britain, the biggest and busiest in stations being in
locations such as London’s Waterloo, King’s Cross, Euston and
cities like Leeds and Manchester etc. There are something like 1,000
Small and Medium Sized Enterprise (SMEs) business tenants throughout
the rail network.

David Biggs,
managing director for Network Rail Property, has said:

“We work in
partnership with retailers and tenants to provide positive
experiences for passengers and communities. In challenging times, it
is important we step up to the plate and show our partners they are
valued, and we are ready and willing to help. That is why we have
taken this decisive action today.

“We also
understand more support may be required as this situation develops.
We will continue to liaise with central government and will keep
speaking with our retailers and tenants about how we can assist
further.”

Network Rail is
writing to all its retail / small business tenants to make them aware
of the new measures to support their businesses.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Network Rail announces rent amnesty for its retail tenants | LandlordZONE.

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London Renters Union Covid-19 template letter

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The London Renters Union have released a template letter for tenants (see below) requesting a suspension of payments until the Coronavirus situation improves. They appear to be insinuating that landlords are being given help by lenders suspending mortgage payments and that tenants haven’t been offered any corresponding assistance.

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To Let or to keep empty for present time?

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I have just purchased a house to let and I don’t have a mortgage on it.

I have an agency looking for a tenant for me. I’m thinking about the current situation and is it best to keep it empty and pay the council tax until this Coronavirus is sorted or rush having someone move in

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Mortgage free rental property and Coronavirus?

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If the rental property is not mortgaged then there is no payment holiday, (for up to three months) for a landlord which 3 month’s monies could then be offered on the understanding this payment holiday benefit is to be passed on to the tenant.

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