COVID-19 FAQs For Landlords
Everything You Need To Know About Lockdown 3.0 & Your Mortgage
As we head into a new national lockdown, we’re here to keep you as up to date as possible with the latest Coronavirus developments, what this all means for your property business, your responsibilities as a landlord and how you can safeguard your portfolio in this uncertain time.
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If you still have questions, don’t worry our entire team are on-hand to help. We can offer you contactless advice wherever you are, via our robust remote working and technology platforms, so feel free to call us on 08009499410 now.
The Buy to Let Broker is open as usual – we’re here to help
As 2021 kicks off, we were all hoping things would be very different. But as the UK heads back into national lockdown, at least nothing can get in the way of your property investment plans.
We believe there are a great many positives this time around;
The housing market will remain open. Property purchases can still go ahead. Surveyors are able to conduct valuations and you are still permitted to move during this latest lockdown.
No matter what happens over the next few weeks, The Buy to Let Broker is still open and the whole team are here to help quell any concerns you may have and assist in your next move so to speak.
Having robust remote working already established within our business means that our entire team will continue to manage your application with little to no disturbance to our ‘contactless’ service.
If you have any questions at all about your portfolio or mortgage application, please call us today to discuss.
What changes are there in the Buy to Let mortgage market in 2021?
Understandably, due to the upheaval of the pandemic, mortgage applications are taking slightly longer than usual, although lenders are being freed up and wait times are reducing, signalled by the recent introduction of 90% residential mortgages.
Due to the specialist nature of Buy to Let, it is hugely difficult for us to give you a rough turnaround time as each lender is different and it will also depend on the complexity of the application as well as the type of finance you need.
As straight-talking mortgage advisors, we’re certainly not here to pull the wool over your eyes, so what we can tell you is, by speaking to one of the team we will be able to advise you on your realistic eligibility, give you the up to the minute updates from each lender and help you identify any potential delays before they arise.
Can you still move house during Lockdown 3.0?
The Government has now confirmed that the housing market is to remain open during this new lockdown.
This means that you should still be able to view properties (whilst adhering to current social distancing measures). Surveyors are still able to visit properties to conduct surveys and yourself or your tenants will be able to move into the property. Removal companies will also still be operating.
Can I still apply for a Mortgage Payment Holiday?
Last October, FCA extended the Mortgage Payment Holidays regulations so if you haven’t as of yet taken a mortgage payment holiday, you will be able to request one up until 31 March 2021
But the far more important question is – Do you absolutely need to take a payment holiday?
If there are no other options (chat to us first!) and this is the route you are forced to take, then of course, the holiday is there for that reason. Never stop direct debit payments without agreeing a holiday first, otherwise, you will go into arrears.
We have, however, had landlords who have taken the view that they will take it because they’ve been offered it and they feel there is some advantage to gain – there absolutely isn’t.
Taking a payment holiday will only delay your payments, not remove them – you will still have to pay the holiday payments back in future. Most landlords are in a fixed period right now, or a lower rate introductory period for say two or five years, if you take a holiday now, during that low fixed-rate period, the three months would be added to the end of your mortgage, so when you come to remortgage at the end of your fixed or introductory period, you will still owe those deferred three months payments, which will then need to be cleared before you can exit the mortgage – sometimes at the higher standard variable rate, depending upon the lender! – interest will also accrue on your holiday payments, so this could be expensive – again, only take this if you need it. We may be able to help you restructure your portfolio to avoid having to do this.
There are also underwriting issues here. The Government has said that these holidays won’t affect your credit score. But – does this mean lenders will still lend to you if you have declared that you cannot afford your current mortgages now? No, it doesn’t. The Buy to Let Broker has seen live applications declined where clients have either taken or only expressed an interest in a payment holiday. A payment holiday is an admittance that you are currently insolvent and unable to pay your outgoings, this will impact your ability to borrow now, but for how long into the future, we don’t know.
Don’t forget that if you are a portfolio landlord, your business plans will have likely expressed to lenders your ability to withstand rental voids (yes we do appreciate that right now this is not a normal occurrence). Indeed, lenders do view your bank statements and rental income when assessing decisions under PRA regulations to assess the liquidity of your portfolio. Again, please be aware that if your tenants are paying you, lenders will take a dim view of you taking payment holidays when you come to require funding, so please continue to make your payments if you have the financial ability to do so. We need to protect your ability to borrow in the future, even if that’s for a remortgage to a better deal and you have no immediate plans to expand your portfolio in future.
It’s also important to note, that not all lenders are supported by the Government’s ‘Term Funding Scheme’ or TFS. Lenders that raise money on the wholesale markets or through institutional investors or Peer to Peer funds, may not have the same financial backup to assist you. Also, lenders do not have to assist landlords who have borrowings within a corporate of SPV structure, although they may well still assist if you really need this help.
At the same time, we are seeing many lenders allowing remortgages, with capital raising, using automatic valuations, so we can assist you in better ways than the ill-advised ‘Government Assistance”.
Always check exactly what the terms are before starting a payment holiday. Better still, talk to us first because we are here to help you through this.
My Tenants Have Said They Can’t Pay Rent, What Do I Do?
As we continue to face unprecedented times, the impact of the outbreak is being felt by homeowners and renters alike. As a landlord, it is important that you are in communication with all of your tenants to fully understand their situation so that you can quickly identify any risk of rental voids.
I Have Been Put On Furlough, How Will This Affect My Mortgage?
The Government recently extended the furlough scheme until March 2021.
If you have recently been furloughed due to the COVID-19 pandemic and you have any questions about your mortgage application or eligibility for a mortgage, we strongly recommend that you get in touch with one of our mortgage specialists.
All of the lenders have different criteria when it comes to furloughed income and eligibility is changing on a daily basis, so by calling we will be able to give you the most up-to-date information. You can either call us on 08009499410 or use the callback request form below and we’ll respond as soon as possible.
How Will The Bank of England Base Rate Affect My Mortgage?
Last year, The Bank of England reduced the base rate to a historic all-time low of 0.1% as an emergency response to COVID-19.
How this will affect you will depend on the type of mortgage you currently have. For example, if you are on a ‘Base Rate Tracker’ you will have heard from your lender with details over when your payments will reduce. If you are sitting on a lenders ‘Standard Variable Rate’ or SVR however, this will be at the lender’s discretion as to how they set their rates in future. If you are on a fixed-rate mortgage, there will be no change to your current payments or rate.
We strongly recommend that you speak to one of our advisers to establish exactly how this may affect your portfolio in an effort to keep your mortgage rates as low as possible.
If You Still Have Questions, We Have Answers!
To get the answers you need, simply pop your details in the form below and one of the team will be in touch to get you sorted.
If you are in a rush, you can also call us on 08009499410 now.
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