Covid-19 Financial Assistance for Landlords

As some tenants struggle to pay their rent during the Covid-19 pandemic, this in turn also has a knock-on effect to landlords.
The Government has advised of the following assistance available:

Mortgage Payment Holidays

Mortgage Lenders will provide three-month mortgage payment holiday including Buy to let mortgages.

A mortgage payment holiday is when your monthly mortgage repayments are paused for a set period. Under the government’s policy, you can apply for a payment holiday of up to three months.  Mortgage payment holidays are available to all homeowners who are up to date on their mortgage payments. They are also available to buy-to-let landlords whose tenants have been financially affected by the coronavirus.

Landlords who take payment holidays are expected to pass on this relief to their tenants.

Please note that you do not need to have contracted or have been tested positive for the coronavirus to apply for a payment holiday. The payment holidays are available to any homeowners who are concerned about their ability to meet their mortgage repayments, for example due to a loss of work or other changes in their circumstances.

Home owners will still owe the bank the same capital amount but interest will continue to accrue. This means it will take you longer and cost you a little more to clear your mortgage.  After three months, your lender will contact you to assess your circumstances and agree on a manageable way for you to make up the deferred payments. Lenders will provide a range of options, which may include extending your mortgage term or altering your monthly payments if it is affordable to do so.

Payment holidays are just one option that lenders can offer, therefore it is best to make contact with your bank or building society to discuss the options available.

The Private Rent Sector Landlord COVID-19 Loan Scheme

A £5 million fund will offer interest-free loans to landlords whose tenants are having difficulty paying rent during the coronavirus (COVID-19) crisis.

The Private Rent Sector Landlord COVID-19 Loan Scheme will offer eligible landlords up to 100% of lost rental income for a single property.  The interest free loan is available for Private Rented Sector landlords who:

• were, or had applied to become, registered before 01 February 2020;
• are not classified as businesses;
• have 5 or less properties available for rent in Scotland that are classed as being within the private rented sector (as per the terms of the 2006 Housing Act)
• have lost rental income as a result of tenants facing difficulty in paying rent as a result of the Covid-19 situation or where a rental property became vacant on or after 01 February 2020 and the landlord is unable to get a new tenant because of the restrictions currently in place.

The loan scheme will cover lost rental income for a single property although landlords will be able to indicate if they are losing rental income from more than one property.

Landlords will be able to apply for a loan to cover lost rental income for a period of up to 6 months, backdated to the 01 March 2020. An initial payment of half of the agreed amount will be available and landlords will be asked to verify the continued loss of income before the second instalment is paid.  Loan repayments will be deferred until October 2020, with the loan being repaid in 12 monthly instalments. This will be kept under review as the Covid-19 outbreak progresses. The loan can be fully repaid at any point and requests for extension of the payback period will be considered on a case by case basis.

The loan is intended to provide an option where other forms of financial support are unavailable to the landlord. Where a landlord is eligible for other forms of support – for example the Coronavirus Self-Employment Income Support Scheme – then they would be expected to take these up rather than apply for this loan.
The application form for the loan can be found here.

Loans and Credit Card Payment Holidays

Most banks have committed to offering Loans and Credit Card Payment Holidays whereby you can request a payment freeze of up to three months.  This covers several borrowing options including:

• credit cards
• store cards
• personal loans
• guarantor loans
• logbook loans
• home collected credit
• loans from Community Development Finance Institution’s (CDFIs)
• some Credit Union loans.

These lenders would have to be regulated by the Financial Conduct Authority for these rules to apply.  It does not cover buy now pay later arrangements and high-cost short-term credit, such as payday loans, or some car finance deals like hire purchase or Personal Contract Purchase (PCP).

Energy Companies

The majority of energy companies have rolled out schemes to help during the outbreak, including posting free top-up cards, organising payment breaks or reductions in how much you pay, reviewing bill payment plans, including debt repayment plans and giving customers a greater time to pay. It has been confirmed that no credit meters will be disconnected during the pandemic.

Broadband and Mobile Phone Companies

Broadband suppliers have scrapped all data caps and mobile phone companies have introduced free data and calls to some of their plans.

Sky Sports and BT Sport

Sky Sports and BT Sport have paused or credited their customers for at least one month of their subscription while sports events have been cancelled due to the coronavirus outbreak.

May 5, 2020