Apart from the tragic loss of life that is happening globally, another tragic consequence of the Coronavirus (COVID-19) is the global financial trouble that it’s causing.
The virus is going to impact every business, one way or another. As a lettings business working with landlords and tenants every day, it was only right that we sat down to think about the possible issues that may arise during this difficult period.
One of the main arrears of concern would be tenant’s falling behind with their rental payments. Tenants may lose their jobs, some may even contract the virus and have to spend time off work, on reduced or lost incomes.
As a landlord, you should always protect your investment against unforeseen circumstances. Rent Guarantee Insurance should now be at the forefront of your mind.
Rent Guarantee Insurance is designed to protect landlords against tenants not paying rent. Not in all circumstances, however, this could increase the chances of recovering some of your losses.
We don’t sell or indorse any Landlord insurance products; however, we would say that protecting your rent should be an area you should consider, right now.
Call your current provider and ask if they can add this to your current landlord insurance policy. Do ensure every detail on the policy is accurate so your claims can’t be rejected. If there are areas of the policy you are unsure about contact the insurer and if needs be, get them to provide you with written details.
Also, If you have an opportunity to reserve some cash, do that now.
Deferred mortgage payments
Speak to your mortgage lender. Some lenders are offering ‘mortgage holidays’ and support for those facing financial difficulties. Royal Bank of Scotland (RBS) and Natwest, among others, have said they will offer repayment deferral for up to 3 months.
To assist tenants who may be impacted by loss of earnings, we will put in place an agreement which will be discussed at the time with Owners.
What if your tenant can’t pay rent because of the coronavirus?
First and foremost, talk to your mortgage lender to find out if they will temporarily defer your payments.
Do what you can to help
Not only is it our tenant’s responsibility to pay their rent, but it’s also your responsibility, as Landlords, to be able to offer flexibility and to help your tenants endure their tough times.
Properties on the market for rent
We have less than a handful of vacant residential properties on the market right now, with this in mind, we’re going to advertise the properties as ‘Rent Offers Welcome’ which means prospective tenants will be given the opportunity to offer lower rent than what is advertised. I’m sure we don’t need to explain the reasons behind this. Let’s look at the bigger picture now.
We’re also contacting any tenants who’ve recently given notice to ask if they’re still vacating the property. We will look at asking those tenants to stay, and depending on the conversation, we may look at reducing rent.
Short Stay Accommodation: Holiday and Corporate Lets
The Coronavirus is now also having a HUGE impact on the short-let market. We’re starting to get cancellations from holiday makers and that is only going to continue, with the likelihood that most bookings between now and June (or further into the year (depending on where guests are travelling from) will be cancelled.
For short-term let owners, one of the other solutions to this possible long-term problem would be offering your home as a residential let. That is something we can discuss, should it be of interest to you.
For any questions or advice regarding this article, or anything else please call me direct on +44 7892891116. We are now working from home for 7 days until further information is shared by the government as to how we should move forward.
In my life on this planet, I haven’t experienced anything like this before. With the possibility of the UK going into lockdown, we can only sit and wait to see how things are likely to move forward. In the short term we can all try to come up with better working solutions, diversifying our talents, helping one another, spending more time with family, being more aware of hand hygiene and simply realising, in the bigger picture, so far, we’re all healthy and riding the Coronavirus wave!
Please stay safe & sterile!
Article written by Nykky Banks, Owner and Property Manager