The current Covid-19 crisis hasn’t just affected those buying and selling property, it has also impacted landlords and tenants. While the Government has announced a range of measures to help support those in the private rented sector and eased lockdown restrictions in England, social distancing continues to place practical constraints on people’s ability to view properties and move.
In the third of our series of webinars examining the property market in lockdown, a panel of experts invited viewers to submit their lettings questions. Here’s a round-up of what they asked as well as the latest on viewings.
How should I deal with tenants who are struggling to pay rent?
The Government is urging landlords to work with their tenants where they are struggling to pay their rent and see if they can reach an agreement. That might be a rent reduction for three months or even a payment holiday. A payment plan can be set up to pay off any arrears over a period of time.
What about viewings?
Following the relaxation of the guidance in England, we continue to carry out virtual viewings in the first instance and once that has taken place we can hold an accompanied viewing. For in-person viewings we are following strict Government guidelines and adhering to social distancing measures that protect the safety of occupiers, prospective tenants and our staff. Removal companies and inventory clerks also have guidelines to follow.
How do lenders view payment holidays for landlords?
We are seeing different responses from different lenders. Some are adopting the same procedure as for sales, so that could be an automated email or their online system, while others are asking for confirmation that the tenants can’t afford their rent. Others are looking at a landlord’s portfolio as a whole and working out whether their other properties could make up a lack of rent. So they’re really assessing whether it’s necessary for the landlord. Speak to your broker or lender directly to get a definitive answer.
Is now a good time to invest in property in the UK? If so, what yields can I get and where should I consider?
Whether or not now is a good time to buy depends a lot on your circumstances, but the fundamentals of the UK market still hold true. Our workforce profile, relative political stability, and the currency play for overseas investors, continue to make the UK a good place to invest.
Choosing where does depend on whether you are prioritising high security of capital or high yield. Of the high value markets somewhere like Chelsea would be great – it never really goes out of fashion and does offer value compared to bordering postcodes. If you are looking for something high yield, with a lower capital commitment, then Manchester might offer good capital and rental returns in the medium term. Personally, if I had to pick one though, I would say Edinburgh as I think it’s a beautiful city with high quality housing stock and great market fundamentals. It is expensive compared to surrounding markets but you are still looking at gross yields of five per cent or even a little bit higher for good apartments.
Is the Government likely to reconsider a restoration of full tax relief on interest costs for landlords?
Unfortunately I would be very surprised if this happens. There would have to be quite a significant change in political philosophy from the Government given that it continues to sustain a desire for home ownership by making sure that demand from private landlords isn’t competing with that.
Are there any discussions around relaxing stamp duty to revive the property market?
There is the possibility that the Government might consider a stamp duty holiday, and it’s something that the RICS is lobbying for. However, I think it would be relatively short lived. The Government will be looking to protect the tax receipts that stamp duty is generating given its current spending commitments.
Further information
To hear more answers, and analysis from the panel and our head of research, Lucian Cook, listen to the recording of our webinar.
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