Renting and coronavirus
Renting and coronavirus
With the coronavirus pandemic continuing, many people are struggling to keep up with their regular rental payments. The Government's Coronavirus Act 2020 aims to protect those at risk, but what does it actually mean? Read our guide to find out.
Coronavirus and tenants
What can I do if I can't pay rent?
The first thing to do if you can’t pay your rent is to contact your landlord. Do this as soon as you can, to try to agree a solution. The Government suggests:
- reaching a temporary agreement not to seek possession action for a period of time
- accepting a lower amount of rent if you're the landlord
- agreeing a plan to pay off monies owed at a later date
If you’d prefer to talk to an independent third party for advice, try Shelter, The Money Advice Service or Citizens Advice.
Your local authority may be able to help you stay in your home with new Government funding. That’s because £500 million has been made available for local authorities to fund households experiencing serious financial trouble.
What has the Government said about renting?
The Government has introduced several measures to protect renters affected by coronavirus. These include:
- From 26 March 2020, landlords have to give all renters three months’ notice if they’re going to serve notice on ending their tenancy. The landlord can’t apply to start the court process until after this time.
- This ruling is to remain in force until 30 September 2020. Both the end of the tenancy and the three-month notice period can be extended if needed. After three months, if the tenant hasn’t moved and the landlord still wants them to move out, the landlord needs to apply to court to proceed. For more information, see the GOV.UK website.
- Between 27 March 2020 and 25 June 2020, all ongoing evictions (either in progress, in the system, or about to enter the system) will be suspended in England and Wales. This may be extended beyond 90 days.
- The Government has made £500 million available to fund households enduring serious financial difficulties.
- Housing Benefit and Universal Credit will increase
- Local Housing Allowance rates are to pay for at least 30% of market rents in each region
What do the Government measures mean for renters?
The temporary Government measures mean that if you can’t pay your rent, your landlord won’t legally be allowed to evict you.
You’re still liable for your rent, however, so if you can afford it, you should pay as usual (don’t forget that your landlord is liable for their mortgage too).
If your income has been severely affected by coronavirus and you’re struggling to pay your rent, you should contact your landlord as soon as possible. The Government is advising tenants and landlords to work together during this time, to try to find a rent payment scheme that works for both of them.
As mentioned earlier, if your landlord goes ahead with eviction, they’re now legally required by the Coronavirus Act 2020 to issue a possession notice, which lasts three months. After three months, your landlord needs a court order to forcibly evict you – although possession hearings are currently suspended until 25 June 2020 in England and Wales.
Coronavirus and landlords
What has the Government said about landlords?
The Government has agreed with lenders to ensure support is available where needed. That includes the option to apply for a three-month mortgage payment holiday for landlords with a Buy to Let mortgage.
If you need to start possession proceedings against a tenant, you’re now legally obliged to give them three months’ notice. However, as mentioned earlier, under the Coronavirus Act 2020, possession hearings are postponed between 27 March 2020 and 25 June 2020.
Remember, the general recommendation is for landlords and tenants to work together to find a solution that works for both parties. Landlords are advised by the Government not to issue new eviction notices during this difficult time, unless they have, in the Government’s words, “a very good reason to do so”.
You’re still legally responsible for the standard of your rented property. Any urgent repairs to safeguard people’s health and safety, should still be made. Any non-urgent repairs should be agreed between you and your tenant for a later date.
Can rental guarantee insurance help?
Rent guarantee insurance can cover your rental income, if your tenants can’t pay their rent. However, many landlords will be asking: is my rental guarantee insurance policy still valid during the coronavirus outbreak?
The short answer is probably not.
Rent guarantee insurance policies in the UK usually only pay out once the landlord has served a Section 21 eviction notice to their tenants, after they’ve stopped paying rent.
But, under the Coronavirus Act 2020, landlords have to give at least three months’ notice to their tenants before they can start the court process to get an eviction notice. And as mentioned previously, between 27 March 2020 and 25 June 2020, all evictions in England and Wales are suspended. This means it’s unlikely that landlords can get a Section 21 notice to evict their non-paying tenants. Without this, rent guarantee insurance policies won’t pay out.
Insurance providers have stopped selling rent guarantee insurance products for the time being. But there isn’t currently any news on whether the terms of these policies will be amended, to reflect the Government’s Coronavirus Act measures.
Please note: The information in this article was correct at the time of publication on 8 April 2020, but, because of the impact of COVID-19, things are changing rapidly. We aim to keep this page updated, but please check with your insurance provider or potential provider directly to confirm any details.