Given the current and evolving situation with COVID-19 and the current restrictions in place in the UK, we are following government guidelines to maintain your rental income.
Here is some advice that we would like to share with you:
Mortgage lenders have collectively agreed to a maximum three-month payment holiday.
Payment holidays will apply to buy to let mortgages as well as residential mortgages and include HMOs and Limited Company lending.
Landlords are expected to pass on any payment holidays to tenants via rent reductions. Please note, this is NOT a waiving of payments; they will simply be deferred to the end of your mortgage or added to your subsequent mortgage payments along with all interest that would have been payable during that time.
This will increase the overall cost of the mortgage you have to pay back, potentially extend the term of your mortgage or increase future monthly payments. Lenders will only agree to a payment holiday if your payments are currently up to date.
It is important that you confirm with your lender in writing (or record the phone call) that payment holidays will not be marked as missed payments on your credit file. They often are under normal circumstances and lenders have only stated that they ‘will do their best’ in this regard.
Once this has all settled get a copy of your credit report to check for any issues.
For more information you need to speak to your lender directly; mortgage brokers, solicitors, Agents and other advisers cannot assist in this regard.
Please bear in mind this is a Government directive issued in response to a fast moving and evolving situation; lenders will still have to put systems and procedures in place so response time may not be instant. In addition, their staff will also be affected and so we envisage the lenders will be experiencing staff shortages and phone lines are going to be extremely busy.
Tenants should also note that where rent holidays are granted, they are merely a payment holiday and not a waiving of rent.
Do not stop paying your mortgages unless completely necessary. Do not use this as an opportunity to make some extra money since, as we have previously said, the payments will still be due and may be added to your mortgage term or spilt over the remaining term of your mortgage making future monthly payments higher.
Lenders and the rental industry are putting a stop on all possessions and repossessions for three months.
None of us know how long this is going to last or how long you may be short of income and you may need that payment holiday in a few months far more than you need it now.
We are operating fully from remote sites and are here to assist in any way possible.
Contact us on:
March Properties 01354 607105
Wisbech Properties 01945 428825
Accounts queries 01354 607105