Landlord - Tenant financial hardship due to coronavirus

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    Landlord - Tenant financial hardship due to coronavirus

    I am really struggling to get any advice so wondered if anyone on here could point me in the correct direction, please?

    I have one rental property which has a Barclays buy to let mortgage. The tenants have been in the house since I first let it - over 5 years. They have always paid on time and are good tenants.

    They contacted me last week explaining they would be in financial hardship due to the coronavirus. I told them not to worry, we would work together to get through it. I want to support them as much as I can.

    I just don’t know now, what I need to do. I have read people on Facebook saying the landlord doesn't have to pay the mortgage, so the tenant doesn't which is obviously untrue. I want to support them but could only cover the mortgage myself for 3 to 4 months. Barclays have no information about buy to let mortgage.

    Should I be eligible for a payment holiday?
    If I did get one, do I just write it off, or are the tenants expected to pay the money back?

    Any advice would be very helpful.



    Thank you.

    #2
    You need to contact Barclays about a payment holiday for your rent.
    What that means is that you will pay no mortgage for (currently) three months.
    It isn't free, the missed payments will be added to what you currently owe and you'll pay interest on the amount you haven't paid in future, so your future payments will be higher.

    There are two different ways you can help your tenant.
    You can agree a temporary reduction in the actual rent.
    That reduces what they would actually owe each month and when this all ends, they'd (hopefully) be able to revert back, owning nothing.

    Or, you agree a rent holiday, on the same basis as your mortgage holiday.
    They pay less or nothing, but they still owe it and have to pay it back later on.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      https://www.barclays.co.uk/coronavirus/mortgages/
      At the moment, we’re only offering payment holidays if you have a residential mortgage (for your home), and if your income has been affected by the coronavirus situation. We're currently looking at a way to help our buy-to-let customers in the short term.

      Comment


        #4
        You mean the government might have misled people when they announced that the mortgage holiday applied to BTL mortgages, as if it already did, rather than being a future aspiration?

        Surely not?
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Hello

          I have also received this request from a tenant. The rent should be paid back perhaps over the course of the tenancy. Your bank will not write off your debt so the tenants should not be allowed this flexibility either - unless of course, you are happy to write off the rent. I would worry this would set a precedent.

          We are all suffering because of this pandemic but I do feel some tenants may use this to their advantage and where does it end? 3 months? 6 months? 12 months? There are many landlords who rely on rental income as their sole income. We as landlords will inevitably lose out somehow and we can thank the government for this very unclear and misleading advice.

          I hope your negotiations go well.

          Comment


            #6
            Tell your tenants to go speak with CAB and their local authority, they will be entitled to rent payments which need to be paid to you...its not ideal but better some cash than no cash. Tell your lender situation and see if they can allow you payment break as along as it does not add any further interest to the loan monies. Next new tenancy take out RLP insurance for £15 which covers your legal fees when evicting a tenant for non payment and the rent

            Comment


              #7
              Hopefully you will be able to get a payment holiday on your mortgage.

              Offer your tenants a payment holiday - rent is still due but arrears will be spread out over a specified time once we are through this. Encourage them to pay as much as they can so that the arrears are manageable in the future. Also point them towards all the Govt help available - UC LHA etc.

              Above all Be Kind

              Good Luck

              Comment


                #8
                Originally posted by jpucng62 View Post
                Offer your tenants a payment holiday - rent is still due but arrears will be spread out over a specified time once we are through this.
                I would say offer nothing concrete until you have got information from them about their income and outgoings and suggestions from them about what they can pay you.
                Then, as above, explore additional benefit help.
                And then agree a way forward that minimises their arrears without causing them and you undue hardship (take into account both your and their savings; a prudent LL would have sufficient reserves to cover 6 months of no rental income).

                Comment


                  #9
                  I've just posted this in another thread

                  You have no obligation to offer a rent holiday.

                  If you want to consider it, the key question is how quickly they could pay for the holiday after the three months and how much interest they could afford on that deferred rent (your tenancy agreement may have this in it).

                  Most people would find paying twice the rent for three months impossible, but even 1.5 x the rent for six months would stretch most people.
                  And if they can afford that in three months, what means that they can't pay the rent now?
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    As a broker and Landlord I am personally disappointed that Barclays seem to be dragging their feet in deciding how to deal with BtL borrowers seeking Payment Holidays , it is simple enough as demonstrated by other BtL lenders to either grant such requests on a Self Certified basis or request detailed information on income and expenditure plus evidence that tenants are requiring a similar payment holiday. There is genuinely no excuse which can be made and this will seriously impact my decision making when deciding on which lender to place the next BtL application with , Brokers are like elephants we have long memories.

                    Comment


                      #11
                      I think there are lots of us with long memories - not just LLs & brokers! How we deal with each other through this crisis will define our relationships for a long time. Some tenants will try to pull a fast one; some LLs will play hard ball, some people will go bust and some will make a mint. With rent difficulties each case needs to be looked at individually and the needs of both parties considered.

                      Where we can help each other we should - no one knows how long this will go on and what the landscape will look like when we come out the other sidse - and we will come out the other side. There are no rules for this situation, we are making it up on the hoof.

                      If you can be generous - be generous. If you can help people less well off than you - help them. We are not just LLs and tenants - we are people. Crises tend to bring out the best and the worst in people. Let's be the best people we can. At the end of this I want tenants to remember how compassionately their LLs dealt with them, not how they lost their home because of their LLs greed.

                      LLs have become hugely unpopular recently due to the actions of a few - we have an opportunity now for the actions of the many to show what compassionate people we are - lets use it.

                      I know some LLs will find this very hard financially so what they can offer tenants will be limited. I am lucky, having been a LL for 20 years I can afford to help my tenants - I know not all can. But please, if you can Be Kind.

                      Good luck to everyone

                      Comment


                        #12
                        I think the problem is that tenants misunderstand the meaning of 'rent holiday'. They think of it as never paying rent for the period they're on 'holiday'.

                        Comment


                          #13
                          It depends on the situation.
                          I've had one tenant (so far) tell me they can't pay April's rent - but I know they're a self employed tennis coach, so I know they're being honest.
                          No income during the lockdown.
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                            #14
                            Your tenants are people - treat them as you would like to be treated So you have a mutual problem that is no-one's fault.. You explore what flexibility is available on your mortgage and then explain to them why you need them to pay what they can. Provide them with information to support benefit claims. Bottom line is that you'd find it hard to get another tenant now so in your interest to support them as much as possible.

                            Comment


                              #15
                              Update from loanarranger.
                              Barclays now offer a BTL payment holiday
                              https://www.barclays.co.uk/coronavirus/mortgages/
                              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                              Comment

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