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Is it time for government to give grants to landlords?

A property industry accreditation service is asking whether it’s now time for the government to offer grants to help landlords through the Coronavirus crisis.

Safeagent says that one option for some landlords hit by reduced income and other virus-related problems is to seek a mortgage holiday - in reality, just a deferral of mortgage payments. 

The Financial Conduct Authority has updated its guidance to lenders on this issue, urging them to allow landlords and other customers to extend ongoing payment deferrals after March 31 next year, to cover payments up to and including July. 

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In addition, the FCA wants lenders to ensure that those landlords and others who take advantage of the scheme do not suffer any worsening of their credit file.

Isobel Thomson, safeagent’s chief executive, describes the FCA move as positive but wonders if it’s really enough.

”While buy to let landlords impacted by tenants’ rent arrears clearly need support, we question if deferral of mortgage payments is the answer, or if it pushes the problem further down the track” she says. 

“While lenders will be adhering to the guidance which provides up to six months deferral, we know it may take badly affected tenants much longer to get back on their feet, meaning landlords could be building up debt and struggling to meet mortgage payments for many months to come.

“We know the good work that agents and landlords are doing to sustain tenancies where tenants are in financial difficulties. But it’s vital that if we are going to keep landlords in the PRS, their financial viability is also maintained, ensuring no unnecessary reductions in the supply of rented housing and helping prevent homelessness.”

Thomson says there is more that could be done, specifically for landlords building up debt because they are unable to pay entirely or are only partially paying what is due on their mortgage due to a shortfall in their tenant’s Universal Credit.

She says they should be eligible for a grant from the government, similar to the Coronavirus small business grant.

“This would recompense them for the shortfall on their mortgage and any additional interest over the period. This is particularly important for landlords with a small number of buy to let properties, who rely heavily on this income” she believes.

“Safeagent is also calling on lenders to commit to no exclusions terms in new or existing buy to let products that prevent lettings to tenants who are claiming benefits. This is important to ensure tenants on benefits can continue to access the private rental sector now and in the future.”

  • George Dawes

    They don't want landlords , they want it all

    Never going to happen

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    From what I'm being told most tenants are still paying, I've lost a commercial tenant of 24 yrs who has now lost her business through no fault of here own, but have a new tenant taking over next month, life goes on, help from government, or council ? forget it, dreaming.

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    The answer to the question in the heading is 'no'. At a time when the economy is being trashed because of Covid, the government should be helping those many who have lost their jobs, those who need food banks, not helping those who own more than one property, i.e. landlords. Sorry, landlords .......... (Why should those earning the minimum wage pay tax towards helping those with more than one property?)

    Andrew McCausland

    Because the those with more than 1 property have used their own hard earned money to house the people on minimum wage or who have lost their jobs and who the government does not provide housing for.

    If the governments of the day (and I include all political parties since the late 1960's) had invested in social housing or not sold off all the council housing we would not be in this position today. However, we need to deal with reality as it is, not where some people may want it to be. The PRS now provides a vital service housing people the government does not, providing the money to do so that the government has not.

    The government has used the same legal system that forces LL to adhere to their responsibilities to withdraw their rights - the right to payment for the service they provide or the right to evict the tenant. The tenants still have their rights to high quality, safe homes but the LL now has no right to payment to provide this.

     
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    David W

    Unlike the feckless, reckless and hopeless that you think you support, but actually harm when you attack landlords, we don' t want or need any hand outs.

    We just want treated fairly and to be allowed to treat decent tenants fairly, which includes making homes available for them by evicting the rogue tenants who break their agreements by not paying the rents due.

     
    Daniela Provvedi

    @ David Wirth, what if the person who has "lost their job and is relying on food banks" also happens to be a LL, AND in addition to that, they're unable to evict their tenants from their 2nd or 3rd property so they can go and live in there? There are people in that situation. How can you answer NO so easily to that question?
    PS - at least you're apologetic about it, thanks.

     
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    Government needs to give interest free backed loans to tenants landlords/agents who are in huge rent arrears in order to clear their debts.

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    Give loans to deserving tenants by all means, provided the money goes straight to cover rent arrears, past present and future. Landlords don't need or want loans or hand outs, just tenants who pay their rent and comply with their tenancy agreements.

     
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    Robert Brown is right. We are OK and the whole idea is patronising. None of us want hand outs.

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    Agreed, no hand outs needed, just tenants that pay their rent in full and on time

     
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