Test­ing time for land­lords

Daily Express - - YOUR MONEY - By Har­vey Jones

CORO­N­AVIRUS is pil­ing pres­sure on buy-to-let land­lords as ten­ants lose their jobs and prop­er­ties lie empty be­cause no­body can view them.

Am­a­teur land­lords were al­ready reel­ing from the Trea­sury’s re­cent tax at­tack, which reduced mort­gage in­ter­est tax relief and cut prof­its.

Many are now con­fused over how they should treat ten­ants whose in­come has been hit by Covid-19, and what sup­port they can claim if they are strug­gling to af­ford their buy-to-let mort­gage.The Govern­ment has said that ten­ants must con­tinue to pay rent if they can. Most are able to thanks to the Job Re­ten­tion Scheme, which pays fur­loughed staff 80 per cent of their salary up to £2,500 a month.The un­em­ployed may find State ben­e­fits are in­suf­fi­cient, though.

Lucy Pendle­ton, manag­ing di­rec­tor at es­tate agent James Pendle­ton, said if ten­ants re­quest help, check their cir­cum­stances have changed by ask­ing them to com­plete an af­ford­abil­ity ques­tion­naire: “A sig­nif­i­cant pro­por­tion of ten­ants re­tracted ren­tal hol­i­day re­quests after as­sess­ing their fi­nances in de­tail.”

Do not rush to evict ten­ants, as this takes time in nor­mal cir­cum­stances, while the no­tice pe­riod has been ex­tended from two to three months dur­ing the pan­demic. Courts have sus­pended re­pos­ses­sion cases un­til at least June 25.

If your own fi­nances are be­ing squeezed, Pendle­ton said check whether you can save money by re­mort­gag­ing: “Find­ing a cheaper deal could save thou­sands.”

Holly Her­bert at We Buy Any House said be­ing flex­i­ble with loyal but strug­gling ten­ants can pay off in the longer run: “It may en­cour­age them to stay in your prop­erty long-term, spar­ing you the cost and has­sle of find­ing new ten­ants.”

Ten­ants and land­lords should agree a sched­ule to re­pay the sus­pended rent.

Land­lords can them­selves take a three-month mort­gage pay­ment hol­i­day but Mark Har­ris, chief ex­ec­u­tive of mort­gage bro­ker SPF Pri­vate Clients, said you still have to re­pay the in­ter­est at a later date: “If you have a cash buf­fer, con­sider dip­ping into that in­stead.”

Those who run their prop­erty let­ting em­pire as a busi­ness may qual­ify for sup­port un­der the Coro­n­avirus Busi­ness In­ter­rup­tion Loan Scheme, he added.

Some in­vestors will be keen to use the un­cer­tainty to snap up bar­gain prop­er­ties, but Har­ris warned that trans­ac­tions could take longer to com­plete, and do­ing up prop­er­ties could be slow: “Make sure you have the cash to cover any de­lays, es­pe­cially if you are tar­get­ing the au­tumn stu­dent rentals mar­ket.”

MELT Prop­erty chief ex­ec­u­tive Evan Main­don­ald said the big­gest dif­fi­culty land­lords now face is let­ting empty prop­er­ties.

MELT is of­fer­ing ini­tial video view­ings, fol­lowed by con­trolled phys­i­cal ones: “We meet prospec­tive ten­ants out­side and hand over the keys.We use ap­pro­pri­ate pro­tec­tive equip­ment and wipe sur­faces.”

Cash-strapped land­lords should only sell if they ur­gently need money: “In a few months, we are likely to see a strong bounce back.”

Pic­ture: GETTY

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