Landlords' top concerns and how to address them during COVID-19
Legislation and tax, property repairs and damage, and managing void periods are among the top concerns of landlords for the year ahead, in addition to the impact of the pandemic on rent payments.
What are landlords' top concerns in the coming year? Managing missed rent payments will now, unquestionably, be first and foremost on landlords’ minds. But, with the Government introducing measures to help those who are struggling financially, letting agents can still focus on helping landlords manage their other key concerns and challenges for the year ahead. Legislation and tax challenges topped these concerns, found the Landlord Maintenance Survey London estate agents Portico, along with property repairs and damage, and managing void periods. Now that lettings activity has resumed, it’s time to leverage these findings to your advantage.
Managing missed rent payments
Now that more people are living without work or pay due to the coronavirus pandemic, tenants missing rent payments is a top concern among landlords. However, the Government is offering help to many employees who have been furloughed and self-employed workers who have lost income due to the coronavirus crisis. To alleviate landlords’ concerns, lenders have extended mortgage payment holidays to buy-to-let mortgages for three months. Meanwhile, landlords and tenants are urged to work together to establish fair rent repayment plans once the emergency legislation period is over. Letting agents can help by facilitating communication between tenants and landlords, and by helping with negotiations as much as possible. Easing tensions helps everyone get through COVID-19 while eliminating questions concerning the status of rental payments. If financial difficulties arise, letting agents should encourage landlords to speak with their mortgage lenders.
Legislative and tax changes
A range of new legislative and tax changes are coming into effect in 2020. Before COVID-19 reared its head, this was named the main concern for landlords across the UK with 58% of the votes. Letting agents can play a vital role in making sure their landlords are kept informed, with many landlords unaware of the latest legislation changes or their obligations. Portico’s survey revealed that 27% of landlords hadn’t even heard of the Homes (Fitness for Human Habitation) Act 2018 which came into effect in March, letting agents can play a vital role in keeping their landlords abreast of the latest changes. Meanwhile, a full quarter of landlords surveyed weren’t sure what rental repairs are tax deductible. Because there have been numerous tax changes for landlords, it is important to help them learn what can be deducted from their rental income. Whether letting agents are working alone or alongside tax experts, it’s possible to help landlords be more tax-efficient and turn a higher profit. This in turn adds value to your services.
The importance of insurance
Tenant behaviour and property damage was revealed to be the third biggest concern among landlords, capturing 27% of the votes in Portico’s survey. Despite that, 14% of landlords said they don’t have landlord insurance, while another 14% aren’t sure if they do or not.
The coronavirus pandemic is highlighting the importance of having insurance, especially rent protection insurance. This provides landlords protection if their tenant misses rental payments so that they don’t suffer a loss of rental income. Letting agents should encourage landlords to contact their insurance providers to see if they are covered, and to acquire insurance if this step hasn’t already been taken.
At the same time, it’s worth noting that some insurance providers state that in order to make a claim, landlords must serve a section 21 or section 8 eviction notice after the tenant has not paid rent for 30 days. As tenant evictions are banned for the time being, this is not possible at present. Letting agents may attempt to facilitate communications and help landlords find resolution with their tenants in the event that this uniquely difficult set of circumstances should arise.
UK property market expected to bounce back
Rental growth is predicted to bounce back quickly too. This is especially true as there is a strong need for more residential properties and private rented accommodation across the UK – and it is a point worth sharing with the landlords you represent. Remember, there is a long-term trend between rental value and income growth. After the economy recovers from the coronavirus crisis, income growth is expected to return, which is forecast to quickly accelerate the rental market, especially in London. Because of that, landlords’ profits are expected to recover once more certainty returns to the economy and market. Letting agents can help by preparing landlords for the coming boom. Helping property owners set a plan in place ahead of time will position them and your agency a step ahead of the competition and help get eager renters into the properties you manage.
This blog post is courtesy of London Estate Agents Portico.