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Today in politics: Coronavirus, mortgage deferrals, building safety and licensing

Sally Walmsley
Written by Sally Walmsley

New figures from Shelter suggest almost a quarter of tenants will see income fall as a result of coronavirus. At the same a broker has raised concerns about the number or landlords asking for mortgage deferrals.

Elsewhere MHCLG has published its latest data on building safety and Coventry Council announced it will not postpone the start of its licensing scheme – despite the pandemic.

Quarter of tenants to lose income

Inside Housing is reporting on research commissioned by Shelter which suggests that an estimated 1.7 million adults living in the private rented sector expect to become unemployed as a result of the coronavirus pandemic.

It says that the polling carried out by YouGov shortly after the government announced its job retention scheme revealed that 24% of private renters have already seen their incomes fall or lost their jobs.

It goes on to say that some two million renters – 23% – believe losing their job would leave them immediately unable to pay their rent.

Polly Neate, chief executive of Shelter is quoted as saying: “The government has rightly suspended evictions until June, so no one has to face homelessness in the middle of this pandemic. But millions of renters will be in dire straits further down the line without more government support.

“As renters lose their jobs and see their incomes hit, many will have to rely on the welfare safety net for the first time. Our services are already hearing from families in homes they could comfortably afford under normal circumstances, who are now in serious financial difficulty.

“We’re facing an onslaught of people suddenly unable to afford their rent, at a time when people need to stay put and cannot safely move to a cheaper home.”

YouGov surveyed 498 adult private renters in England online between 24 and 27 March.

Shelter’s estimates for how many people could be affected nationwide are based on a total adult population of 8,674,570 private renters in England.

Landlords criticised over mortgage deferral scheme

Landlords have been criticised by a broker for allegedly trying to cash in on the Coronavirus crisis by demanding mortgage holidays they do not absolutely need.

Mortgage for Business has issued a statement claiming only “a handful” of landlords contacting its switchboard about repayment holidays are raising legitimate concerns. 

It says that while some landlords may be in genuine financial hardship as a result of COVID-19, most have sufficient means to get them through a difficult period.

Steve Olejnik, managing director of Mortgages for Business says: “Only a handful of are raising legitimate concerns about how to pay their mortgage in the face of the COVID-19 pandemic. Quite apart from the moral implications of abusing an emergency mortgage repayment scheme brought in at a time of national crisis, it could play out badly for the landlord.”

His firm’s statement then suggests that “landlords need to think long and hard before submitting a request for a payment holiday to their mortgage lender.”

Olejnik continues: “Landlords must be aware that any requests could potentially damage any approaches to that lender. Lenders expect landlords to be able to cover void periods under normal circumstances – where a property is empty, and a landlord isn’t getting any rent – so they won’t take kindly to landlords trying to take advantage of them just to build up some cash reserves.”

He goes on: “One borrower with three live cases with their lender approached them for repayment holidays on another, existing loan. The lender immediately cancelled all three. Smart landlords, who want to capitalise on short-term house price falls and expand their portfolios when the lockdown is lifted, should think long and hard before approaching their lender.”

The broker says that a landlord’s tenant may be in distress and unable to make rental payments, but to benefit from the scheme, landlords also need to unable to meet their mortgage repayments.

Olejnik says: “Don’t jump on the repayment holiday bandwagon. Any deferred payments will have to be made at some stage and it could create problems down the line – especially when you come to refinance or grow the portfolio.”

New building safety figures

MHCLG has published the 29th monthly data release from the government’s Building Safety Programme. Of note it says: 

  • There are 144 high-rise residential and publicly owned buildings in England that have completed remediation works to remove and replace Aluminium Composite Material (ACM) cladding systems – an increase of two since the end of February.
  • There are 313 high-rise residential and publicly owned buildings with ACM cladding systems unlikely to meet Building Regulations yet to be remediated in England.
  • Of the 84 social sector residential buildings with ACM cladding systems unlikely to meet Building Regulations yet to be remediated: 
  • 75 have started remediation 
  • 9 have a remediation plan in place but works have not started
  • Of the 182 private sector residential buildings with ACM cladding systems unlikely to meet Building Regulations yet to be remediated:
  • 41 have started remediation;
  • 99 have a remediation plan in place but works have not started;
  • 41 have responded with an intent to remediate and are developing plans; and
  • 1 has unclear remediation plans

Coventry refuses to postpone licensing scheme

The Coventry Telegraph has written a piece on the local council’s decision to proceed with its licensing scheme, including reaction from the NRLA 

The piece includes a quote from a tenant who says the council should be pausing the scheme.

Of note, it says that whilst the council has declined to postpone the start date if the scheme, it did say that “measures are in place to ease payments.”

Councillor Tariq Khan, cabinet member for housing and communities, is quoted as saying:

 “These include extending the date for compliance for a further six months – until November – and that landlords will only be asked for the first stage payment of £450.

“It is hoped that this will show landlords that enforcement action will not be pursued and that a reasonable approach should be taken in these exceptional times to help tenants stay in their homes and to stay safe.

“The government has also recently passed the Coronavirus Act which includes measures to suspend evictions from private rented accommodation, giving more time for tenants, along with a package of support for private landlords.

“If a landlord is having problems paying the initial fee, or needs advice we would urge them to contact us so we can work together to ensure we find a solution tailored to individual requirements.

“If landlords are attempting to illegally evict tenants then the council will investigate such cases. The team can be contacted at hmo@coventry.go.uk.

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

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