If anything is certain during a pandemic, it’s uncertainty. As strict measures are brought into force by governments to curb contact between people, the ripples of ambiguity spread out into the economy. Ultimately, this means that people are likely to lose their jobs – at least for the time being.
In the UK, around 10 million people work in roles that may be at risk. These are mostly in client-facing and service industries like retail, hospitality, and recreation. Those on zero-hours contracts are particularly vulnerable in these fluid times.
Losing your job is stressful in any period, and not least during a global pandemic when new opportunities may be few and far between. For those that do, however, help is at hand.
In this post, we’ll look at what assistance the government has offered to those that can’t meet monthly payments, and what this means for renters and landlords alike.
Advice for renters
If you’re renting and are struggling financially due to the current situation, then your landlord can’t evict you for at least three months. This is according to new legislation that the government is planning to bring into force shortly.
This three-month period is intended to ease any financial burden on workers that have lost their jobs or are earning less because of lockdown measures.
Crucially, it doesn’t mean that you won’t have to pay the missed rent at some point in the future. The Ministry of Housing, Communities, and Local Government said that after this three-month period, “landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances”.
The specifics of any repayment plans are therefore at the discretion of landlords, and may cause financial difficulties for renters further down the line.
If you want to get out of a tenancy early, for reasons related to the coronavirus outbreak, whether or not your landlord allows you to do this is at their discretion. Ultimately, you’re both bound by a contractual agreement. That said, if you’re able to prove that you’re no longer able to pay your rent as a direct result of the virus, you may be able to come to an agreement with them.
Advice for landlords
Whilst the government’s announcement brings relief to renters – at least as a short-term measure – it may come as a cause for concern for some landlords. The new rules allow for the possibility of significantly lower rental incomes over the next few months.
To balance this, the government is introducing payment ‘holidays’ of up to three months for landlords with buy-to-let mortgages. This essentially allows them more freedom to manage tenants in financial difficulty – though it also means they’ll have to eventually foot the bill of the extra accrued interest.
After this time, as with the eviction break, landlords are expected to find the most amenable agreement possible with their tenants. According to the NLRA, this might mean lowering rates for a while, before allowing tenants to pay rent in arrears.
What are other countries doing?
Whilst the UK has decided to protect renters from being evicted and has offered landlords mortgage ‘holidays’, other countries are taking different measures to ensure people aren’t left without a home:
Denmark – The Danish government has agreed to pay 75% of the salaries of those that have been fired, and 90% of the wages of hourly workers (up to the value of 26,000 Danish Kroner, which is approximately £3,162, per month).
United States – The US has declared a national state of emergency, which means greater flexibility for individual states regarding unemployment benefits, and access for those that are struggling to Disaster Unemployment Assistance. There’s also talk of the US government sending direct cash payments to every American in the coming weeks.
Italy – Europe’s worst-hit country hasn’t brought in specific rules for renters, but has paused mortgage repayments which allows landlords to be more lenient with tenants that are unable to pay. More generally, Italian banks are also loosening their approach to debt repayments.
Germany – Angela Merkel’s government has extended a pre-existing programme called ‘Kurzarbeit’, which basically allows cash-strapped employers to keep staff on whilst paying them less, and the state will top up the rest.
The coronavirus pandemic has brought the world to a standstill and sown uncertainty everywhere. As the UK economy stutters amidst the ambiguity, renters and landlords alike are seeking reassurance from the government. With the latest measures announced by the government, both appear to have a temporary solution to what is hoped will be a temporary problem.
If you’re a renter or landlord in South-West London, and are concerned what impact the current situation will have for you, please get in contact with James Anderson. Our expert advisors will be able to provide clarification and help you navigate these uncertain times.
Getting in touch during the pandemic:
- Property Management: 020 8878 4277
- All other enquiries: 0208 487 9090
We are updating the following guides as new information becomes available so you can refer to them regularly.