COVID-19: Landlords’ Top Concerns and How to Address Them

Portico London estate agents recently shared the results of their Landlord Maintenance Survey, which revealed the main concerns among UK landlords. Though the survey was conducted before the coronavirus crisis began, the survey still gives a useful picture of landlord sentiment and the private rental sector.

In the current climate, landlords may now view missed rent payments as their biggest current concern. But, what are the other issues that landlords are facing – and how can they mitigate these worries to get the best return on their investment in a tough market?

Legislative and tax changes

There is a range of new legislative and tax changes coming into effect in 2020, and this was named the main concern for landlords across the UK with 58% of the votes. Portico’s survey even revealed 27% of landlords haven’t heard of the Homes (Fitness for Human Habitation) Act 2018 which came into effect March 2020. 

The act has been rolled out to ensure landlords keep rental properties safe and free from health hazards. This also ties in with landlords second main concern – property maintenance issues. Tenants have a right to a decent, warm and safe place to live. However, keep in mind that during this time only urgent and necessary property repairs should be undertaken. 

As of April 2020, all rental properties must have a minimum energy efficiency rating of an E or above – including existing tenancies. The Tenant Fees Act is also being extended in June 2020 so that most tenant fees are banned for new tenancies. There are also further legislative changes on the horizon as well. With extra time at home during the government-mandated lockdown, it could be a beneficial time to read up on the new legislation impacting landlords, so you can ensure you’re compliant and get ahead of the new changes.

Additionally, a quarter of landlords aren’t sure what rental repairs are tax-deductible. Because there have been numerous tax changes for landlords, it’s important to know what can be deducted from your rental income to help you be more tax-efficient and turn a higher profit.

Void periods

Void periods were the sixth-largest concern for landlords in the survey, capturing 15% of the votes. More landlords have started utilising short-term rentals in order to maximise revenue in between long-term tenancies, making void periods less of a worry for landlords. However, as the Government has encouraged people to delay moving house if possible, this could put a financial strain on landlords who have rental properties sitting empty. 

There might be prospective tenants who need to find a new rental property, so record a video tour of your property and advertise on Zoopla and Rightmove as well as on social media. Consider lowering the monthly rent price slightly to boost interest.

Tenants missing rent payments

Now that more people are living without work or pay due to the coronavirus pandemic and lockdown, tenants missing rent payments is expected to be a top concern among landlords. However, the Government is offering help to landlords and tenants, plus small businesses, employees who have been furloughed and self-employed workers who have lost income due to the coronavirus crisis. This is expected to help many people needing to pay rent. 

For the next three months, there have been a rental evictions ban put in place in England and it could be extended for longer. This means landlords aren’t able to evict their tenants if they’re not able to pay rent due to the impact of coronavirus. All ongoing possession proceedings are also suspended. 

To alleviate landlords’ concerns, lenders have extended mortgage payment holidays to buy-to-let mortgages for three months, but despite this, some landlords are considering selling up. It’s recommended that landlords establish proactive communication with their tenants. If any issues arise financially, landlords should speak to their mortgage lender. Landlords and tenants are urged to work together to establish fair repayment plans once the emergency legislation period is over.

The importance of rent guarantee insurance 

Tenant behaviour and property damage was the third biggest concern among landlords with 27% of the votes in Portico’s survey. Despite that, 14% of landlords said they don’t have landlord insurance, while another 14% aren’t sure if they do or not. 

The coronavirus pandemic is highlighting the importance of having insurance, especially rent guarantee. This typically provides landlords protection if their tenant misses rental payments so that they don’t suffer a loss of rental income – though whether this will still apply during a pandemic will depend on the type of cover and the cover’s T&Cs. 

For example, some insurance providers state landlords must serve a section 21 or section 8 eviction notice after the tenant has not paid rent for 30 days in order to make a claim. As tenant evictions are banned, for the time being, this is not possible at present. To see if you are covered, contact your insurance provider.

UK property market expected to bounce back

The property market is expected to slow down throughout the coronavirus pandemic but is unlikely to come to a halt. The Government has made an extensive amount of support available, which will likely help the economy recover quicker. 

Rental growth is also expected to drop off in the next few months, but it’s predicted to bounce back quickly too. This is especially true as there is a strong need for more residential properties and private rented accommodation across the UK. 

Additionally, there is a long-term trend between rental value and income growth. After the economy recovers from the coronavirus crisis, income growth is expected to return, which is forecast to quickly accelerate the rental market, especially in London. Because of that, landlords profits are expected to recover once more certainty returns to the economy and market.

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