Coronavirus: You can’t just stop paying rent, tenants told

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Coronavirus: You can’t just stop paying rent, tenants told

Tenants must not presume the coronavirus outbreak is “a green light” to stop paying their rent, a landlords group has said.

The National Residential Landlords Association (NRLA) said the government needed to be clearer about the support provided by landlords and lenders.

Some groups have called for struggling tenants, and students in particular, to be given time rent-free.

But landlords said this would put the long-term future of rentals at risk.

Ben Beadle, chief executive of the NRLA, said landlords needed to be flexible when tenants were struggling financially, and offer a temporary break for those tenants in real need.

This would allow tenants up to three months when they would not pay rent. The payments missed would need to be made up through larger rent requirements in subsequent months. The rent “holiday” should only start after an agreement was reached between the tenant and landlord.

“This is not a green light to tenants everywhere to stop paying their rent,” he said.

Homeowning v renting at different age groups graph

Landlords themselves can apply to their mortgage lender for a repayment holiday of their own, if they are struggling as a direct result of coronavirus.

When this support was put in place by government and the banks, it was made clear that any landlord taking up such an option should pass this advantage on to tenants by deferring their rent. The government also announced a three-month ban on evictions in England and Wales, with similar plans also discussed in Scotland.

Some tenants’ groups want the support to go much further. The London Renters’ Union wants a suspension of all rent payments, to avoid a build-up of unsustainable debt.

The National Union of Students has called for landlords to stop charging rent to students who have left their digs empty and returned home, with teaching cancelled for the foreseeable future.

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‘I’m having to move out’

Natalia Kurteczko
Image caption Natalia Kurteczko saw her work dry up

Self-employed events organiser Natalia Kurteczko, 30, has lived in Oxford for seven years, lodging in a house.

But she said a lack of work because events were suddenly cancelled meant she was planning to move into a hostel because she could live there rent-free in exchange for work.

“I have decided that I am going to keep my savings and move to a hostel and volunteer for 20 hours a week and I can stay for free” she said.

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Landlords have said that granting tenants a complete suspension of rent would put many in an impossible financial position.

The NRLA said that many were individuals who made the majority of their income from lettings, and were far removed from the position of big corporate landlords.

They faced extra costs, such as council tax on empty properties and upkeep, rather than only mortgage payments.

The association said that cancelling rent, particularly in the case of students – who were still receiving maintenance grants, could mean these properties would no longer be available to rent when things returned to some level of normality as landlords would have gone under financially.

It said tenants were receiving financial support from government, such as 80% of wages paid if they are furloughed, so they could still make bill payments, such as rent.

Meanwhile, homeowners are also being urged by banks to ensure they have an agreement with their lender to defer repayments before they stopped paying their mortgage.

UK Finance, which represents the banks, said some people had simply cancelled direct debits without permission, which could lead to problems when remortgaging in the future.

Story taken from BBC website

By Alex Groom, 7th April 2020.