Lockdown finance support and options

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It has been another tough start to the year for everyone, including landlords, many of whom have tenants that are unable to pay their rent in full (or at all) due to COVID-19. With many already struggling to cope under the tighter restrictions in the UK

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Third lockdown has created a perfect storm for the property market

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The latest Hometrack House Price Index for January is indicating the third national lockdown is exacerbating a supply and demand imbalance in housing with demand for homes in the first two weeks of January up 13%, but supply down 12% creating a corresponding house price increase of 4.3%.

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LATEST: HM Treasury to be grilled over stamp duty deadline extension by MPs

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A senior HM Treasury spokesperson is to be grilled by MPs on why the Chancellor has so far not extended the stamp duty holiday deadline.

Current estimates show that between 350,000 and 500,000 home purchases are hoping to complete by the deadline of 31^st March including thousands of landlords, who if they can complete on time will not be charged stamp duty on properties under £500,000.
Landlords will still have to pay the additional 3% ‘second home’ duty.

A petition signed by over 130,000 people meant parliamentary authorities were required to consider allowing a debate on extending the holiday deadline by six months, but last week this was kicked into the long grass by Covid safety requirements.

But the official Petitions Committee has now circumvented the suspension of debates within Westminster Hall by organising an online debate within parliament this Monday (1^st February ) at 4.30pm.

HM Treasury is sending Jesse Norman (pictured, below), Financial Secretary to the Treasury to answer questions, which will be led by Elliot Colburn MP.

“As was the case when Westminster Hall was closed due to Covid-19 last year, we have had to innovate to find ways to hold the Government to account, and crucially to voice the concerns of petitioners in the House of Commons, while our usual debates cannot be held,” says Catherine McKinnell MP, Chair of the Commons Petitions Committee.

“As these petitions demonstrate, there are important issues affecting hundreds of thousands of people that are being missed. Their calls for help and support must be heard.”

The 90 minute virtual sessions will be open to all to watch live on Parliament TV and Parliament’s YouTube channel.

Read Tom Entwistle’s examination of the stamp duty holiday.

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First ‘sex for rent’ prosecution against Surrey landlord under way

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A landlord exposed by Jeremy Kyle investigators has become the first person to face ‘sex for rent’ charges.

Christopher Cox, 52, from Cranleigh, in Surrey, will appear in court next month charged with two counts of inciting prostitution for gain and one count of controlling prostitution for gain, following an investigation by TV researchers into landlords offering rent-free accommodation in return for sex.

Cox was featured in an episode of the Kyle Files in 2019, where a female producer posed as a vulnerable prospective tenant. They then handed a dossier to Surrey Police.

In January 2019, legal guidance was changed to make this kind of exploitation punishable by a seven-year jail term, after the charity Shelter revealed that 250,000 women had been targeted in the previous five years.

Criminal inquiries

Senior crown prosecutor Claire Prodger says: “The charges arose out of an investigation by ITV researchers, passed to police in 2019, which resulted in further criminal inquiries.

“This is a complex case and we have reached the decision following a careful review of all the evidence gathered during this period.

“It is extremely important that there should be no reporting, commentary or sharing of information online which could in any way prejudice these proceedings.”

Shelter research suggests 30,000 women in the UK have been propositioned with explicit ‘arrangements’ since the coronavirus pandemic started in March.

Cox will make his first court appearance at North East Surrey Magistrates Court in Staines (pictured) on 24^th February.

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Private sale swap with BTL buyback?

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I think the initial part of this plan sounds like a relatively straight forward proposition, but the second buyback part probably not… so, I hope the good people of P118 can point me in the right direction!

I’m living in a property that still has a mortgage

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Northern Ireland government to help ALL university students pay their rent

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Northern Ireland’s economy minister Diane Dodds (pictured, above) has vowed to boost student hardship funds and push universities to support tenants during the pandemic including students renting properties off private landlords.

While she insists that student accommodation is a matter between the individual student and their private, university or corporate landlord, Dodds says she recognises students are in a very difficult position as a result of the COVID restrictions.

The minister was being grilled by MPs at the Northern Ireland Assembly, where MP Mark Durkan asked if she would meet the accommodation costs of university and college students renting property they couldn’t use while courses moved online.

Dodds replied that she was looking at ways to provide more support, including asking the Student Loans Company to investigate whether it can deliver payments to all Northern Ireland students.

Financial hardship

“My department, through the universities, continues to provide support to any students who face genuine financial hardship for whatever reason, including difficulties with their accommodation contracts,” said Dodds.

“In recognition of those difficulties and the ongoing impact of the Covid-19 pandemic…I will be seeking additional funding to increase the total amount that is available for student hardship in the current financial year.

“I have also instructed the universities to publicise and promote the availability of those additional funds to ensure that they reach eligible students as quickly as possible and to consider whether any requirements set by them for students to access funds can be relaxed or removed.”

The National Union of Students in Northern Ireland says students shouldn’t have to pay for accommodation they’re unable to access and claims they’re being treated unfairly by private landlords.

Queen’s University has extended a rent holiday for students living in their halls of residence until the beginning of March, while Ulster University is reviewing requests to leave student accommodation early on an individual basis.

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Readers’ Letter: Can I get around the six-month notice eviction rule?

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A LandlordZONE reader called Rebecca has been in touch to ask whether landlords like her can get around the Covid-related six-month minimum notice period required before possession hearings can be started to evict a tenant who has stopped paying their rent.

We asked evictions specialist Paul Shamplina to answer her two specific questions.

Question: Would landlords be within their rights to only accept tenants who are willing and able to pay six months’ rent up front?

Paul says: “Yes, you could ask a tenant to pay the rent up front but tenants apart from maybe international students are unlikely to be willing to do that, and most couldn’t afford to even if they were willing to.

“And while you wait until you find a tenant who will, you’re going to have your property sitting empty, which isn’t ideal.

“You’d be better off asking for your tenants to provide a guarantor, which many landlords suggest when a prospective tenant has a poor credit rating or references. Or landlords can take out rent guarantee insurance.

“You’ve got to be realistic and commercially-minded as a landlord; there are lots of decent tenants out there who prefer to pay monthly.”

Question: Could we serve six months’ notice at the same time as issuing a tenancy to ensure that, should it be necessary due to non-payment of rent, we are ahead of the game in terms of beginning the eviction process?

Paul says: No, not really. Under the current rules that came in during August last year, landlords can only serve a six-month notice period which is called a Form 6a after four months of a AST tenancy agreement so effectively the minimum term is now ten months.

“When I gave advice to the government on this, I made the point that giving notice to someone on the day they move in was poor practice – and judges will take a dim view of it plus it doesn’t put your relationship with a tenant on a good footing.”

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Can I resolve noisy neighbour issue for my tenant?

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I have a Maisonette that has been let to the same tenant for three years, and she is the absolute perfect tenant. It is a two-level building in an affluent area and there have been a couple living above (not my Flat) for the last two years without any issue.

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Government: ‘No direct financial support for landlords during Covid’

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The government has once again refused to consider a financial support scheme for landlords who are suffering financial hardship due to the Covid pandemic.

Lord Greenhalgh made the comments yesterday in parliament, saying the package of indirect help for landlords was sufficient, kicking in the long grass hopes of financial support similar to those offered in Wales and Scotland.

But as we have highlighted in recent weeks and months, some landlords face grave financial problems as they struggle to evict tenants who are using the Covid pandemic as an excuse not to pay their rent, with landlords often ignored by the DWP and their plights deprioritised by the police, social services and courts.

Lord Taylor of Warwick asked Lord Greenhalgh, who is the government’s housing spokesperson in the House of Lords ‘what plans they have to introduce specific financial support for landlords who have lost rent as a direct result of the COVID-19 pandemic?’.

Furlough enough

The answer came that the government is supporting landlords by helping tenants keep their jobs via the ongoing furlough scheme, and that only 7% of tenants had rent arrears.

This claim is based on research within the English Housing Survey’s Household Resilience Study which, he omitted to mention, is nearly six months old or that rent arrears are rising – up from 3% before the pandemic to 7% by the end of July last year.

“This indicates our package of support is working and has prevented widespread arrears,” said Greenhalgh.

“Where landlords find themselves in coronavirus-related hardship, mortgage lenders have agreed to offer payment holidays of up to six months, including for buy-to-let mortgages.

“The application window is open until 31 March 2021.The FCA has been clear that for borrowers who have taken six months’ holiday and continue to face ongoing financial difficulties, firms should continue to provide support through tailored forbearance options.”

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LATEST: Number of EU renters in UK has dropped by 620,000 since Referendum

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Changes created by Brexit for fishermen and other food as well as manufacturing and retail businesses has been well documented in recent weeks, but now it’s the turn of the private rental market.

Analysis of 300,000 transactions completed since the referendum has revealed a dramatic drop in the number of EU nationals taking up tenancies across the country over the past four years as the UK has waited to exit the EU.

Completed by lettings platform Goodlord, the research shows a steady decline in the number of EU tenants; from January 2017 to November 2020 the proportion fell from 20% to 14% of all tenants, an overall decrease of 6%. Based on the 10 million people who rent in the UK, that’s 620,000 fewer.

International tenants from non-EU countries also fell; from 13% to 11%. As a result, the proportion of renters with UK citizenship rose from 66% to 74%.

Rental drop

The most dramatic drop in the proportion of rental arrivals from the EU took place from 2019 onwards, during which landlords saw a 2% drop. 

London, which has always had the largest EU population, saw its proportion of EU tenants drop from 29% to 22%. British nationals now account for 61% of all London tenants, up from 48% in 2017. 

“There was no mass exodus of EU citizens following the Brexit vote,” says Tom Mundy (pictured), COO of Goodlord.

“Instead, we’ve seen a steady but marked decrease in the number of people from the EU moving to England over the last four years.

“This trend has borne out across the whole of England, but particularly so in London, which had a higher number of EU tenants to start with.”

Read more: Hurdles EU citizens must clear to rent in the UK now.

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