Following on from my blog of 27^th April on the subject of Residential Possession during Coronavirus the government has now announced an extension to the suspension of possession proceedings and evictions until 23^rd August 2020.

The hold on possessions was previously until 25^th June 2020.  The extension adds a further two months.  If landlords had tenants that were already in arrears before the new measures, and because of the length of time it will take to get a possession order even after the hold is lifted, many landlords will, unfortunately, be facing arrears of 12 months or more and could face difficulties servicing mortgages, covering the costs of repairs and maintenance, and other issues caused by the absence of rental income.  The FCA’s draft guidance proposing a 3-month extension for mortgage payment holidays has been accepted, and this includes buy to let borrowers.

As in my previous blog, it should be remembered that tenants are not exempted from the liability to pay rent during this period, and they should be engaging with their landlord to come to an arrangement they can afford rather than paying nothing, and/or agreeing how the arrears are to be reduced after any agreed rent arrangements have ended.  However, the reality if tenants have lost their employment or have been on reduced pay, is that they may never be able to make up the lost rent and landlords will eventually have the added expense and delay of possession proceedings to add to the arrears.  By the same score, although landlords can apply for a payment holiday, they  have to be up to date with payments in order to do so.  Their mortgage repayments will increase after the payment holiday has ended to cover the missed months and the additional interest that has accrued.  They may never recover sufficient rent from their tenants to cover this.  Landlord groups are looking to the government to offer additional help for landlords.

The extension to the hold on possession proceedings also applies to commercial properties, see my blogs   https://bhayanilaw.vmdev.co.uk/advice-for-commercial-landlords-and-tenants-affected-by-coronavirus/  and  https://bhayanilaw.vmdev.co.uk/commercial-landlords-and-tenants-affected-by-coronavirus-update-11-may-2020/.  

For more advice on Residential Possession during Coronavirus contact Sarah Coates-Madden today.