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.”