Close form

What Measures is the Government Taking to help the Rental Sector?

27 March 2020
Darren Hughes
COVID-19, Property Investors & Developers

The impact of COVID-19 could adversely affect both tenants and landlords. We examine what help the government is giving to both of these groups of individuals.

In this ever changing environment, the government has announced plans to support Tenants and Landlords whose income is being affected by COVID-19.

In legislation that was rushed through parliament before the house rose on Wednesday 25 March, and is now part of the Coronavirus Act 2020, private tenants cannot be evicted for at least three months even if they are struggling with their rent. In addition, landlords have been urged “to show compassion” and allow affected tenants to remain in their homes “wherever possible”. Landlords are still permitted to start eviction proceedings but they must give their tenants at least three months notice. This legislation will cover the period from now until 30 September 2020.

So what will landlords do if they stop receiving rent and cannot evict their tenants?

The Chancellor of the Exchequer has announced that banks will give “payment holidays” of up to three months from paying their mortgage. The unpaid interest will, however, need to be paid later, although individual credit ratings will not be affected. The government has confirmed that the repayment holiday will be extended to landlords.

If, as a landlord, you become financially impacted by the non-payment of your tenants through coronavirus related circumstances, we strongly recommend that you speak to your lender. You could consider where applicable, changing from a repayment mortgage to an interest only mortgage or requesting a payment holiday. This is unlikely to happen immediately and may take a period of time for mortgage companies to catch up with this imminent change once passed.

Please note that interest will continue to be calculated over the payment holiday and will be added to the loan amount. Ultimately you could see your monthly amount adjusted accordingly after the payment holiday.

What about commercial property?

Commercial tenants who cannot pay their rent because of COVID-19 will also be protected from eviction as mentioned in the Coronavirus Act 2020.

These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June. There is the option for the government to extend this period if needed.

This is not a rental holiday. All commercial tenants will still be liable for the rent.

If you have any questions or queries please do not hesitate in contacting Jan or Darren in our tax department.

Should I put my buy to let into a limited company?

The content in this blog is correct as at 27 March 2020 See terms and conditions.

Similar articles

person holding grinder
3 July 2020

What is the Construction Industry (CIS) scheme?

The construction industry scheme is designed to stop tax on invoices raised by the self employed or limited companies (called subcontractors) who provide labour within the construction industry to businesses which are also within the construction industry (called contractors).

trees by house
15 April 2020

Are you using the best software for your property rental business?

Working in the property industry can be a minefield with all the various accounting regulations that need to be followed. This can be made easier with a good record keeping system that works for your business and keeps you compliant!

Sorry we're closed wooden sign
3 April 2020

How can I reduce the rent on my commercial premises?

Recent events are putting considerable strain on businesses which rent leasehold premises so what options do you have? We believe that it is in the tenant and the landlord’s interest to work together to come up with a solution which in the long run will benefit both parties.

Our 3 step risk-free guarantee puts your mind at rest and keeps us on our toes!

FIND OUT MORE
Bryant House - Friend and Grant Chartered Acocuntants and Tax Advisors

Book Your Discovery Meeting

Are you hungry for success? If you run a small to medium size business and you want to grow your sales, increase profitability and pay less tax then you have come to the right place.