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TODAY'S OTHER NEWS

Renters should ‘know if their landlord has benefited from a mortgage holiday’

Landlords who have benefited from a mortgage holiday should pass this on to financially distressed tenants, according to Mary-Anne Bowring, group managing director at Ringley, which manages thousands of homes across the UK.

Bowring wants to see renters who are struggling financially feel comfortable to request a reduction in rent, especially if their landlord has secured a mortgage repayment, interest or repayment-and-interest holiday. 

The government, which has banned evictions until June, has said landlords can apply for a three-month mortgage holiday, which Bowring believes should be used to help renters waiting for income support or not covered by government schemes to avoid breaching affordability criteria.

The Coronavirus Job Retention Scheme – in which the state will pay 80% of wages with a cap of £2,500 a month per worker – went live on 20th April. More than £2.6bn has been claimed for by businesses covering 2.2m employees, with over 9m workers expected to eventually be covered by the scheme.

The government has also pledged support for the self-employed in a similar scheme which will see 80% of trading profits covered, again with a cap of £2,500 a month.

However, there are still gaps within the system, with warnings two million business owners who pay themselves through dividends are not covered by the government schemes, while income support promised for the self-employed will not be available until June.

Bowring commented: “The word ‘unprecedented’ has been used a lot in response to the impact Coronavirus is having but statistic after statistic shows a level of damage not even seen during the worst of the Great Financial Crisis.

“The government has moved decisively to help protect tenants and landlords, but it is inevitable some households will fall through the gaps as the various income support schemes get up and running and payments are processed.

“Transparency is key, and renters have a right to know if their landlord has benefited from a mortgage holiday and if they are struggling financially should be able to request a reduction in rent.

“Any rent reduction must be conditional on being able to prove financial hardship to prevent abuse and it is important tenants and landlords work together during this uniquely difficult time. What is important is that the government doesn’t effectively payout twice.”

Poll: Have you taken a mortgage payment holiday?

PLACE YOUR VOTE BELOW

  • luigi kippelwich

    The mortgage holiday is not a' benefit' but an amount waived to be paid in the future with interest. The 'holiday' allows the landlord not to be forced to default on mortgage payments so have the property seized by the banks for non-payment. For the tenant to have a 'rent holiday' on the same grounds means they get a break but next month should pay Double Rent to pay for the shortfall.

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    Luigi Kipplewich
    I agree with your point. For fairness,
    if Tenants want the benefit of Landlords payment holiday as a reduced/nil rent for 3 months, they should also agree to pay the Increased rent for the duration of their stay.
    The mortgage provider is going to continue charging the higher monthly mortgage payments regardless of whether the tenant pays or not.
    Tenants want benefit now, they need to take responsibility for higher future rents or leave.

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    We are all in the same boat and Landlord(s) generally want to help their tenants whilst making sure they can keep their commitments and not increase their debt or outgoings. To help tenants the government would need to put more in place to help landlords. (though what the government has in place for those losing income (which is what rent is paid from) is far superior to many countries at this time.

    The word "payment holiday" is so misleading it should be called
    "Deferred mortgage payment that will be capitalized and so added to the mortgage borrower(s) total debt and interest will be charged on this additional borrowing over the full remaining term of the mortgage resulting in lots more interest being paid back to the bank until the mortgage debt is repaid"

    Historically in some cases lenders also use to record payment holidays as the borrower falling behind on the initially agreed mortgage payments which has the potential to result in adverse credit, so anyone considering one should double check the lender wont record it as falling behind on payments (in the current environment ones I have spoke to are not)

    Ultimately everyone wants to help everyone else in the current environment
    But the wording "payment holiday" is easily mis-understood and borrower should try to avoid taking one unless they have no other option or they feel they can afford the extra they will be charged in both interest and increased monthly payments after the period of differed mortgage payments

    Everyone is in different situations but the idea behind the government support schemes, Grants for businesses, 80% of salary for furlough staff and help to the self employed is surely there to enable everyone to pay the essentials like food, utilities and rent during this time - far far better than what many countries are doing for people.

    Private landlord may choose to help which is amazing, (many are not in a position to do so though) but so called "payment holidays" cost landlords a lot more money in the medium to long term and this should be explained to tenants and the working is so misleading - To help tenants the government should put proper support in place for landlord the majority of which rely on the rent coming in as crucial to meet their own commitments. There are two sides to this coin -so called "payment holidays" put landlords in more debt. The increased payment to pay back the extra interest will be over the remaining term of the mortgage which in many cases will be far longer than the current tenants are likely to stay.

  • Mark Wilson

    The chances of this happening are zero!

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    Yeah, agreed ! - my point really is responsibility should not fall on private landlords and as per other comment there are no benefits to so called "payment holidays" , tenant are barking up the wrong tree suggesting they should get rent relief because the landlord may be able to get a so called "payment holiday" - in many cases 80% of salary should be more than adequate for many (although appreciate everyone has their own personal set of circumstances) to keep paying their rent and those supporting calls for landlord to pass on "payment holidays" to tenants really should be asking the government to do something for the private landlords , which yes is very unlikely

     
  •  G romit

    There are no benefits, and several downsides for Landlords pre-emptively getting a mortgage holiday, they may not even need to.
    Bowring hasn't a clue and obviously been promoted to her level of incompetence.

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    That is one agency added to my "never use" file. She has as much idea of how to gain customer confidence as Ryanair's O'Leary!

     
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    nfw=normal for women

    look at dodds and rayner in labor party!

     
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    Why do people misuse the word BENEFIT?
    Things have 'features' and they perhaps have an 'advantage'. However a benefit is a personal thing and there is no such thing as a 'benefit' for deferring mortgage payments. There is going to come a time when the interest not paid will need to be paid as will the payments missed in some cases.
    There can only be a disadvantage here for anyone who decides to go along this route. This can in no way be described as a benefit.

  • Matthew Payne

    I have still only seen press on 5 lenders offering them, so it is not widely available, and surely this is cart before horse? Why would a LL apply for a mortgage holiday to start with especially if they haven't had any rent arrears? One estimate I have seen says the expected average cost is about £2000 more over the lifetime of the term. Who is going to cover that cost, let alone the rent arrears created, perhaps Ringley if they want to see their idea become a practical reality? I suspect Mary -Anne would politely decline.

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    I have not taken a mortgage holiday but I have to say that is non of their business whether I have or not!

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    I am totally in agreement with you on this, and was going to make the same comment.
    Who the hell does she think she is suggesting this, because as you point out, it is none of her business.
    it very much depends on the circumstances of the individual landlord whether he or she wishes to offer this concession.
    So far, none of my tenants has asked for a rent holiday, but I am not offering them until they request it. Then I will certainly have to consider doing so, but until then, I will carry on as usual.

     
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    I too agree with you Gordon. As with you I am arrears free at the moment and don't need a so called holiday. Perhaps tenants should forward a copy of there bank statement each month so I can monitor how well they manage there income!
    These fools with there world is flat and moon is made of cheese ideas shouldn`t be allowed an opinion it just upsets so many people for no good reason.

     
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    As a landlord we are charged additional interest on the mortgage during periods of 'payment holidays'. If a tenant wants to benefit from a landlord's payment holiday why aren't we allowed to charge them the equivalent amount of interest on top of the missed payments for the remainder of their tenancy?

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    Why Marc Da Silva do you give credence to such nonsence by publishing such rubbish ?
    Go and find something possitive to write about please or I for one will be removing myself from this e mail list .
    I look forward to your responce.

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    Shame you never learned how to spell or how to notice the little red line under the words that are incorrect. Go back to school as you make yourself look the fool you clearly are.

     
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    Just a thought - if we have to tell tenants when we're 'benefitting' from things so they can pay less why aren't we told when they get a pay rise so we know they can afford higher rents? Oh, silly me, I forgot we're money grabbing evil b*st*rds, the lowest of the low, and don't deserve anything, in fact we should be grateful that they're living in our houses even if they're not paying for it.

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    Sticks and stones Laura, we are the ones laughing all the way to the bank, so they can call me what they like.

     
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    Just about sums it up.
    We are very lucky that Corbyn didn't get elected, as there is nothing more hateful to a socialist than a private landlord.

     
  • icon

    Government is killing the rental market by giving tenants too many rights.
    We can’t charge them since fees ban.
    Why should my tenants know what I am communicating with my lender? That’s a private matter.

  • peter greenwood

    This is a ridiculous comment stating that Landlords who have 'benefited' from a mortgage holiday should pass this on to their financially distressed tenants.
    This is not a benefit, it is a 'deferred payment', and the landlord will have to make up this missed payment with interest in the future. In addition, the landlord as a result of missing these payments will get a negative credit rating, which is likely to affect their mortgage interest rates that they will be available to get when they next come to remortgage the property.
    I do believe in doing what we can for tenants, but I feel the best and fairest way to do this is offer any renters in financial difficulty the option to make deferred payments, on some of their monthly rent, with the tenant paying what they are able to for the 3 months that the government has currently directed. On the understanding that this is a deferred payment and that the tenant will need to repay these missed payments in the future once Covid restrictions are lifted. Or alternatively, renters should write to their MPs and ask them to press the Government to pay rents in full for renters who for Covid reasons are unable to make their rent payments.

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