Coronavirus has put many buy-to-let landlords in a spin, and since the government announced that mortgage payment holidays would extend to buy-to-let landlords, we’ve been inundated with questions.
The landscape and official guidance is changing daily, and we’ll do our best to keep you as updated as possible. But for now, here’s what we know about the buy-to-let mortgage payment holidays for landlords.
The three month mortgage payment holiday is part of the government’s response to the Coronavirus (COVID-19) pandemic. It allows homeowners a three month break from their mortgage payments should they be facing difficulty paying their mortgages during this time.
They had to really.
We’re seeing many industries affected by the Coronavirus right now which is having a huge impact on employment. To stop landlords suffering a drop in rental income due to tenants’ financial difficulties, the mortgage payment holiday will give landlords some much welcome relief should their tenant be unable to pay their rent.
If you feel your tenant is likely to be affected by the Coronavirus or your tenant has raised concerns, you’ll need to contact your lender as soon as possible.
To benefit from the buy-to-let mortgage payment holiday, you’ll need to be up-to-date with your current mortgage payments and your tenant must have been affected by the Coronavirus.
You cannot qualify for a buy-to-let mortgage payment break if you simply just want a three month break from paying your mortgage.
Your lender will talk you through your options.
For the three month period, you won’t need to make your scheduled mortgage payments, however this will need to be rectified at a later date.
Some lenders are extending the term of the mortgage, and others are increasing future mortgage payments. Make sure you understand exactly how your lender is treating the mortgage holiday as it currently varies from lender to lender.
Another point worth raising with your specific lender.
The government and UK Finance has advised that lenders will be making every effort to ensure that the buy-to-let mortgage payment holiday does not impact credit records – it’s still worth checking with your lender that this is the case.
Yes. This will very much be a partnership between a landlord and tenant. The payment holiday does not mean the rent will not need to be repaid at a later date, as with mortgages.
If your tenant is affected by the Coronavirus and is unable to pay their rent, it’s important to establish an affordable repayment plan, taking into account their financial circumstances.
To avoid escalating rental costs, tenants should be encouraged to continue to pay their rent for as long as they can afford to.
Looking for more info on how the Coronavirus (COVID-19) is likely to affect the property market? You can find that here.