Whether you’re on a zero hours contract, have been furloughed, made redundant or have seen your hours cut, many workers across the UK now find themselves with financial worries. For those in rented accommodation, their ability to pay the rent during the Covid-19 crisis will be a major concern. The Government is issuing guidance that stipulates ‘landlords should show compassion and to allow tenants who are affected by this national emergency to remain in their homes wherever possible’, so what might this mean and how can renters ensure they have enough cash to keep a roof over their heads?
We've pulled together the official advice for tenants who may be in immediate financial distress.
Make your rental payment your priority
Your main concern should be staying in your home, especially if you need to isolate or work away from your usual workplace. If you start suffering cash flow problems, speak to your utility suppliers – gas, electricity, phone and broadband – about the possibility of reduced payments, debt repayment schemes, a temporary break in billing or switching to a cheaper tariff.
Check what benefits you may be entitled to
The Government has introduced a number of new initiatives to help those who are experiencing financial difficulties, so it’s worth checking what new benefits you could claim to towards your rent. The Citizens Advice website is a great place to check what you could be entitled to.
Ask for a reduced rent or deferred payments
Not all landlords are ogres. If you have a problem with paying, speak to your landlord if you rent directly or contact your letting agent if they manage the property. It maybe possible to negotiate a temporary rent reduction or a delayed payment scheme but ensure to get any agreement in writing.
Pay particular attention to the wording, which will explain whether the rent is being deferred and can therefore be collected at a later date, or if the rent is being cancelled so the renter does not ever have to pay it. If written into an agreement, a landlord may be entitled to take any rent shortfall out of the renter's deposit, should there be a deficit at the end of the tenancy.
Suggest your landlords takes a mortgage payment holiday
Many rental properties have been bought by a landlord using a buy-to-let mortgage and the landlord uses your rent to pay their monthly mortgage payment. Lenders are allowing landlords to take a ‘mortgage payment holiday’ for up to three months– meaning they don’t have to pay their mortgage during a 12 week period, which may allow them to pass on a reduced rent payment to tenants.
It is worth remembering that a mortgage payment holiday does not mean your landlord gets three free months. The money owed is simply deferred and added on to the end of the mortgage term, meaning it will take the landlord three extra months to clear their debt. For that reason, your landlord may not want to take a mortgage payment holiday.
Evictions due to non-payment of rent
The official Government guidelines state: “tenants are still legally obliged to pay rent and landlords are still able to issue eviction notices to renters who enter into rent debt” however, under the new Corona virus Act,landlords will not be able to start proceedings to evict tenants for at least a three-month period, starting from 26th March – a time frame that maybe extended if the current situation continues. This doesn’t mean to say renters won’t receive an eviction notice for non-payment of rent in the future,so keeping up with rent payments should be a number one priority.
If you’d like to create better cash flow in the future, why not speak to Canopy about deposit-free renting?