LandlordZONE has heard from a mortgage broker, letting agent and landlord about the difficulties the sector is facing during the crisis.
First signs that tenants are beginning to feel the economic pain of Coronavirus are beginning to emerge, LandlordZONE can report.
An agent in North London, Dreamview Estates, has told us that he’s already had three tenants unable to pay their rent this week, including one stuck in Peru who is unable to return to work after the country went into lockdown.
Angus Stewart, chief executive at mortgage broker Property Master, says landlords are reporting that some tenants are late with rent payments or may not be able to pay their rent at all.
He tells LandlordZONE: “One landlord’s tenant hasn’t been paid by his Italian company so can’t pay the rent. Where will the short-fall be met from?” The broker is also urging lenders to take an understanding approach when dealing with customers struggling to pay their mortgages due to the Coronavirus outbreak, and landlords facing loan repayment problems as tenants begin to default on rents.
Stewart also points out that, even though landlords have now been included in the government’s plans to introduce three-month mortgage payment holidays, the ‘interest will keep rolling up’.
Call for action
Speaking to LandlordZONE, British Landlords Association CEO Sajjad Ahmad agrees that the Government needs to take landlords into consideration.
Ahmad recognises that while some tenants are genuinely self-isolating, he says some might use the situation as an excuse not to pay rent.
He adds: “What support is there for landlords who have mortgages to pay? Some of our members are also now concerned that property prices will drop and they will have trouble selling. I hope the Government will soon provide some clarity.”
One landlord’s view
Ahmad’s were echoed by one of our readers, Dave, who this morning said: “The mortgage holiday plan is no help to Landlords that are mortgage-free on their let properties and depend on the rental income as their only means of income.
“They can’t pick money off the tree, are not able to claim benefits due to owning assets, which obviously can’t be liquidated.
“All landlords irrespective of their own circumstances will undoubtably have tenants that struggle or are unable to pay their rent and will, I am sure, be sympathetic in these circumstances and treat tenants with the empathy they deserve.
“With that in mind will any Landlord groups be asking the government to provide additional funding on behalf of those Landlords that have no income?”.