A landlord’s guide to coronavirus

Your question answered by Catherine Westerling, Head of Lettings, Hamptons International.

Do I still have to undertake maintenance work?

Landlord’s repair obligations have not changed, and tenants still have every right to expect a decent, warm and safe place to live. Constructive dialogue between landlords (or their agents) and tenants is key, and tenants should still grant access for urgent repairs where it is reasonable and safe for them to do so. Non-urgent repairs require a pragmatic approach from all parties at this time, and non-essential routine tasks should likely be deferred until current restrictions on travel and social distancing are eased.

What can I do with an empty property?

Empty properties can, and are, still being marketed and let. For many renters, an empty property is particularly appealing at present as it means they can move quickly if required. Video tours which were recorded before restrictions were imposed have proved incredibly popular with tenants, and landlords who live close to their unoccupied properties have been very happy to visit and record amateur versions for us themselves. Many tenants remain happy to commit to a property they have viewed this way, especially if they only need to rent for a fairly short period of time.

Will I be charged council tax on an empty property? 

You’ll usually have to pay council tax on an empty home, but your council can decide to give a discount – the amount is up to them. It is worth contacting your council in light of the unprecedented nature of the current crisis, but be aware that you can be charged up to double your Council Tax if your property sits empty for 2 years or more.

Does being a landlord count as being self-employed?

This depends on the level of involvement the landlord has. In order for a property owner to be a self-employed earner, their property management activities must extend beyond those generally associated with being a landlord. For example, in addition to fully managing all letting, maintenance, repair, rental and compliance matters a self-employed landlord would need to be operating multiple properties, perhaps actively looking to acquire more and generating enough income (for income tax purposes) from these activities to be considered a business or trade. Guidance should be sought from an experienced accountant to ensure that all landlord’s properties are owned and operated in the most tax efficient manner.

Does landlord insurance cover coronavirus? 

This could be interesting. Most landlord insurance policies which provide cover for rent arrears will only pay out once the tenant has been in arrears for a certain period of time and once the relevant statutory notices have been served to regain possession of the property. The government introduced measures in mid-March to prevent tenants being evicted for rent arrears for a period of 3 months. This may leave insured landlords facing delays with their claims and/or trapped in an unintended loophole which could leave them unable to claim as soon as they previously might have. It will be interesting to see whether the unprecedented nature of this situation encourages insurers to adopt a pragmatic interpretation of their policy rules. Income protection policies may be worth exploring for professional or self-employed landlords who generate their incomes from property.

Rules on paying rent throughout coronavirus: do tenants still have to pay?

Absolutely. Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. The government has a strong package of financial support available to tenants, and where they can pay the rent as normal they should do so. Tenants who are unable to pay their rent should speak to their landlord at the earliest opportunity. In our experience, the majority of landlords have been extremely understanding and reasonable short-term adjustments to payment terms have been agreed.

Can landlords still evict tenants?

The Coronavirus Act 2020 protects most tenants in the private rented sector by extending the notice period that landlords must give, when seeking possession of their properties, to at least three months. As of the end of March, any possession claims in the system or about to enter the system will have been affected by a 90-day suspension of possession hearings and court orders too.

Will taking a three-month mortgage holiday hurt your credit score?

This is currently unclear. Mortgage lenders have agreed to offer payment holidays of up to three months, including for buy-to-let mortgages, where Coronavirus-related hardship occurs. The sums owed remain due, and interest will continue to accrue during any payment holiday period. Pragmatically, lenders will prefer payment holidays to mortgage arrears but should perhaps still be reserved until other alternatives have been exhausted.

What other financial support is available for landlords? 

Deferred self-assessment tax returns is probably the main help for landlords, over and above the package of measures referred to above which any UK resident can apply to receive if eligible. Whilst this deferment won’t change the overall financial picture for landlords, it will certainly ease pressure on cash flow.

Catherine Westerling

Head of Residential Lettings, Hamptons International