Payprop is urging landlords and letting agents to have robust payment systems in place to implement and potentially track changes to payments due to the financial uncertainty caused by the spread of coronavirus.
Although there is currently no official guidance from the government on whether landlords should give payment holidays to tenants affected by COVID-19, the letting payment automation provider says that there are likely to be a number of informal agreements between landlords and tenants to reduce or defer rent payments temporarily over the next few weeks.
"Many landlords will be open to helping their tenants during tough times,” said Neil Cobbold, chief sales officer at PayProp.
Letting agents can play their part by recording any changes to clients' payment schedules.
“Agents will need to notify landlords if tenants come to them saying they can't pay their rent,” Cobbold added.
The government has given more clarity to landlords by confirming that they can apply for a three-month buy-to-let mortgage payment holiday.
The terms of the payment holiday will be up to the landlord's lender - their payments could be increased across the whole of their remaining term or their term may be extended by three months to cover the repayments.
“If landlords are changing their mortgage repayment structure, they will need to factor in how their portfolios will be affected and consider any changes to their expected rental income from tenants,” Cobbold continued.
“Agencies need to remind their landlords that they must actively apply for a buy-to-let mortgage holiday in order to benefit, while providing them with an update on how their incomings and outgoings are being affected.”
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