Covid-19 Code of practice for commercial landlords and tenants

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High street businesses and landlords are set to receive a new government code of practice providing improved clarity and reassurance over rent payments.

A working group has been established by the government with the commercial rental sector to develop a code which encourages fair and transparent discussions between landlords and tenants over rental payments during the coronavirus pandemic and guidance on rent arrears payments and treatment of sub-letter and suppliers.

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Sign up to an NRLA regional webinar this June

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The country may still be in lockdown, but the NRLA’s usual regional meetings are still taking place albeit virtually, through a series of regional webinars. Hosted by our regional representatives, the online webinars give landlords the chance to connect with landlords in their area during these unusual times, and hear the latest advice around managing […]

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BREAKING: ‘Coronavirus rent renegotiation code’ to be introduced for commercial landlords and tenants

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Government has set up a working group to nail down the code, which will apply during the pandemic and will help spread the financial burdens created by the crisis across the sector.

A code of practice that will encourage ‘fair and transparent’ rent payment discussions between commercial landlords and tenants has been announced by the government.

Yet to be issued, a working group has been established to hammer out the code following a consultation with industry bodies.

Once the new code is published, it will apply as long as the Coronavirus crisis continues.

The announcement coincides with separate news from lenders’ trade body UK Finance, which says its members will continue to support commercial landlords ahead of the second quarter rent payment deadline on June 25^th.

This is likely to trigger another wave of rent payment deferral requests from tenants, an issue that the new working group is to examine alongside how sub-letters and suppliers should be treated.

The government says the key aim of code will be to encourage all the players in the commercial property sector to shoulder the financial burden of the crisis.

“We expect all parties to come to the table so our high streets and town centres are in the best possible position to come back from these challenges,” says Housing secretary Robert Jenrick.

“We are giving clarity to landlords and tenants who are both facing equal pressures on their finances so they are all able to stabilise their finances and bounce back.”

Chancellor Rishi Sunak has also been involved in the decision to formulate the code, saying: “We continue to work with lenders to ensure flexible support is provided to commercial landlords, including payment holidays and restructuring facilities, and it is right that where landlords receive support, they extend this to their tenants.”

Read more about commercial property and the Coronavirus.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: ‘Coronavirus rent renegotiation code’ to be introduced for commercial landlords and tenants | LandlordZONE.

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Bridging lenders excited about future lending prospects

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Bridging lenders and their intermediaries are feeling positive, following the easing of recent restrictions due to covid-19

The specialist finance industry has been hit hard in recent
weeks and bridging lenders have had to halt any new business during the
coronavirus lockdown. With over 50 bridging lenders and hundreds of
intermediaries, the industry has seen very slow growth with hundreds of staff
been put on furlough and a limited funding due to no construction work, surveys
or auctions taking place.

However, with restrictions easing, the thousands of
households and property developers that use bridging finance each year will be
able to start purchasing properties and getting their businesses back on track.

“It has been a testing time for the bridging industry,”
explains Dan Kettle of Octagon Capital. “Our products
are often used as a quick way to buy properties and avoid mortgage chains, but
the lockdown has meant that almost all deals were put on hold and we could not
acquire any new business.”

“However, with restrictions easing, we are in a good
position to resume funding again. Many people and investors will be excited to
start building and buying property again and with mortgage lending even tighter
than before, we could see positive growth and a good Q4.”

During the 10-week lockdown period, bridging providers were
on tenterhooks over whether
they could offer mortgage holidays to their customers and what the
terms would be surrounding their agreements. Bridging finance is often used for
a maximum of 24 months, but with so many construction jobs halted, the chance
of these running their course could lead to the deals expiring and challenges
for customers in terms of repossession or refinancing.

Nicholas Wallwork of the Property Forum explained: “The vast
majority of building sites have come to a standstill. As a consequence, those
working against tight bridging loan finance repayment dates will struggle. The
property/project, if work does not restart very soon, would likely be worth
nowhere near their target value. As a consequence, they would not be able to
raise as much traditional finance as expected which would usually be used to
pay off the bridging loan. Indeed, when you also factor in the potential
reduction in property prices on the whole there could be a huge shortfall.”

However, with restrictions easing and the Prime Minister
looking to open all non-essential retail by 15^th June, there is more
confidence in the specialist finance and bridging industry and many will be
delighted to hear this news.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Bridging lenders excited about future lending prospects | LandlordZONE.

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Landlord Hero of the Week #5: Ethical Lettings

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As the rental market continues to cope with the challenges of Coronavirus, we highlight a company working its landlords to lessen its impact on their tenants.

As a community
interest company, Ethical Lettings does good on a regular basis, but the
pandemic bought out the best in its landlords too.

The social lettings agency works across Surrey and South West London in partnership with local councils to find affordable rented accommodation for its tenants who are all on benefits or low incomes, reinvesting its profits and funding extra support for those in need to improve their quality of life.

Its staff help with writing CVs, claiming benefits and work with local authority mental health teams.

Paying landlords guaranteed monthly rent in advance, Ethical Lettings is proud of a 98.7% rent collection rate across its 200 properties, but director Georgina Summerfield says before the lockdown she panicked that this would drop to 55% as tenants’ circumstances changed – a predicted £90,000 a month loss.

Wide of the mark

Luckily, it was wide of
the mark, says Summerfield.
“We’ve been in direct contact
with each tenant, working to maximise their income, assisting with benefit
claims, accessing Government funding and offering advice on various ways to
reduce expenditure.”

And as a result of this
hard work, Ethical Lettings’ rent collection rate for April topped 95%.

While its landlords were supportive – agreeing to a change in payment terms from the usual one month in advance to one month in arrears – the company in turn, has supported them.

She explains: “For those who would have experienced financial hardship as a result, we applied for a Government bounce-back loan and also created a landlord hardship fund to ensure they weren’t adversely affected.

“One of our landlords in South Africa couldn’t get hold of her mortgage provider to apply for a mortgage holiday so her rent was paid in full. Another was made redundant herself so her payment was made in full as normal in advance.”

Adds Summerfield: “Our landlords have been amazingly supportive – this crisis has really bought out the best in people.”

Read last week’s Hero Landlord story.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Hero of the Week #5: Ethical Lettings | LandlordZONE.

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Should I let to family through my limited company?

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As the title suggests, I’m considering getting a BTL via a limited company with the intention of letting it to family – who would claim housing benefit. The family already lives in a council flat and benefits from getting housing benefit.

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Long term rental of Furnished Holiday Let?

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We have received an enquiry for long term rental of 3 months for our Furnished Holiday Let (FHL), over our quiet period this coming winter and it appears quite tempting to take it.

We have been running this FHL over the last 5 years and have complied with the occupancy rules each year and fully qualify.

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Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed

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Property giant Cushman & Wakefield admits student rental market faces huge challenges at the moment but says it still offers a long-term investment opportunity.

Global
property agent Cushman & Wakefield is bullish about the UK’s student
accommodation sector, despite gloomy predictions for the next academic year.

It’s just completed deals on two student accommodation blocks in Leicester and Edinburgh for £22 million; Dover Street in Leicester has 135 bed spaces while Goods Corner in Edinburgh (pictured) has 108 studio bed spaces. It says both properties have been 100% let with strong bookings for the 2020/21 academic year.

However, London Economics research suggests that more
than 230,000 fewer students will enter higher education as a result of the
crisis, over half of which are international students.

That fall in student numbers would translate into a drop in income of around £1.51bn from non-EU students, £350m from EU students and £612m from UK students opting to stay away.

Lost revenue

Universities UK, the representative organisation for
the UK’s universities, has also reported that institutions will suffer an
estimated £790m in lost revenue in the 2019/20 academic year. Cushman &
Wakefield’s student accommodation advisory team says about 44% of this figure was
due to accommodation rebates.

Russell Hefferan, partner in Cushman & Wakefield’s student accommodation capital markets team, says: “Whilst in the immediate term COVID-19 presents obvious challenges for the industry, this transaction provides an excellent example of the strong, long-term fundamentals student accommodation offers.

“Overall,
in the UK there is a healthy amount of student applications, with overseas numbers
ahead of 2019 according to UCAS. From 2021 there is also going to be a
continued increase in the number of UK 18 year olds coming through the system.
The demand and supply dynamics remain positive for the sector and it is in good
shape to weather the storm.”

Homes for Students will manage and operate both blocks.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed | LandlordZONE.

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London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies

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Sadiq Khan says he wants to help local trading standards officers and the police spot, deal with and report unethical and illegal activity by landlords in London.

Mayor of London Sadiq Khan has vowed to get tough on both rogue and unethical landlords by rolling out a training programme for local authorities and the police.

He’s now promoting courses for council housing and trading standards teams in how to deal with unlawful behaviour by rogue landlords including rent-to-rent scams, sub-tenancies, harassment and illegal evictions.

The Mayor’s team is also working with the Metropolitan Police to help officers better respond to illegal eviction calls; they can use his ‘Report a Rogue Landlord or Agent’ tool to log incidents they attend so that council teams can follow up with the tenant and start enforcement action if needed.

Homelessness

Khan believes many of London’s
private renters are facing imminent homelessness unless the Government provides
more support and acts now to properly protect them from eviction when the ban
is lifted.

He says some unscrupulous landlords
and letting agents are even ignoring the ban and threatening renters with eviction.

“Many
renters are just one pay cheque away from homelessness,” he says. “It’s
completely unacceptable that London renters should be facing a ticking timebomb
where they could lose their home.

“Suggestions that
landlords and their tenants agree ‘affordable repayment plans’ between
themselves is totally unfair, and unrealistic in many cases.” 

In April Khan set out his proposal for a ‘Triple Lock’ protection for renters, calling on the Government to increase welfare support for renters, make section 8 discretionary in court proceedings and scrap section 21 evictions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies | LandlordZONE.

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Aldermore resumes physical BTL valuations in England

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Aldermore Bank is resuming physical mortgage valuations on rental properties for Buy to Let purchase and remortgage in England.

Strict social distancing and safety measures will be met in line with Government guidance released on 10 May. Aldermore will ensure a detailed risk assessment is undertaken ahead of a valuation appointment so that the safety of residents and surveyors is prioritised.

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