Tag: Rent arrears

How PlanetRent makes rent collection easier

Lesley Davis Leave a comment
Help your tenants pay their rent on time with PlanetRent

The evictions ban was extended earlier this month until 23 August. Great news for renters facing financial hardship but, as we blogged last week, not so good for landlords with no other income to fall back on.

The National Residential Landlords Association is rightly highlighting the problems being faced by landlords whose tenants were already in significant rent arrears before the Coronavirus lockdown. They now have two more months without rent, plus the time it will take to repossess their properties once the ban is lifted. This could be financially devastating for landlords whose rental homes provide the entirety of their income and who have no savings to fall back on. Given that a third of Brits have less than £600 in savings, the outlook for many landlords following the extension of the ban is pretty bleak.

In response the NRLA is calling for:

  • a clear statement from the Government urging tenants who can pay their rent to do so;
  • support for tenants in the form of a boost to the Local Housing Allowance, developing interest-free hardship loans for tenants;
  • providing compensation to landlords who have existing possession orders from the courts but can’t evict tenants until the ban is lifted;
  • ensuring the courts process legitimate possession claims quickly once they open again; and
  • giving priority to possession cases that that began before the lockdown, to those related to pre-pandemic rent arrears, and cases of tenants committing anti-social behaviour or domestic violence.

Our new automated lettings platform PlanetRent is designed to help landlords reduce the likelihood of rent arrears. Here’s how it works. PlanetRent collects rent from joint tenants individually – which improves the collection rate – and then jointly from other tenants if one should default.

Landlords can turn on Collect my rent by direct debit, allowing PlanetRent to sort out the paperwork and send tenants a direct debit mandate when they e-sign their tenancy agreement. Not only do direct debit payments mean that landlords can collect the rent straight from the tenant’s bank account but they have the advantage of apportioning payments to a regular date. Some tenants may worry that their landlord can take money out of their account whenever they want. But in fact, customers who pay by direct debit are fully protected by the Direct Debit Guarantee.

PlanetRent automates and simplifies rent collection, There’s no subscription and we have a great pricing model. Our new platform is pay-as-you-go, so why not check it out today and help your tenants pay their rent quickly, easily – and on time!

www.planetrent.co.uk

Why not READ our Property Blog too: www.ringleypropertyblog.co.uk

What is Labour’s five-point plan for renters?

Lesley Davis Leave a comment
We say two years to pay back arrears is not practical or necessary for most renters

A five-point plan to help renters cope with the economic fallout of the Covid-19 outbreak has been published by the Labour Party. The Bank of England has warned that the UK could be heading for a deep post-lockdown recession, which is likely to heavily impact tenants in the private rented sector.  Last week we blogged about the Government’s response. There are plans for a protocol to help tenants in rent arrears avoid immediate eviction when the lockdown ends.

This week, as the Prime Minister announced plans to ease Covid-19 restrictions, Labour is calling on the government to go further and bring in new measures to protect tenants, proposing the existing three-month evictions ban be extended and renters are given a two-year timeframe to pay back rent arrears.

The Government has already banned evictions for three months and increased the Local Housing Allowance but Labour wants to see temporary legislation provide greater protection for renters. Its five-point plan proposes:

  1. Extending the evictions ban for six months or however long is needed to implement the legal changes set out below.
  1. Giving renters at least two years to pay back any arrears from the lockdown period.
  1. Giving residential tenants the same protections as commercial tenants, by not allowing them to be made bankrupt by their landlords for non-payment of rent.
  1. Bringing forward the government’s proposal to scrap Section 21 ‘no-fault’ evictions and outlawing evictions on the grounds of rent arrears if the arrears were accrued because of hardship caused by the coronavirus crisis.
  1. Speeding up and improving the provision of Universal Credit and considering a temporary increase to the Local Housing Allowance to help prevent the risk of homelessness.

The Momentum group within the Labour party wants to go further and is calling for a “people’s bailout” which would mean cancelling rent completely rather than giving tenants two years to pay arrears to landlords.

 At Ringley we are happy to back any fair and workable proposals that will help tenants stay in their homes. From the beginning of lockdown, we have actively encouraged the landlords we work with to engage with tenants facing financial hardship so that arrears can be dealt with sympathetically. But to suggest that any rent owed should be simply wiped off the slate is both unfair and unreasonable, particularly now that the Chancellor has announced an extension to the Government’s Coronavirus Job Retention Scheme to help ensure people are provided for while they cannot work.

Most landlords are not faceless institutions but small business people who are simply trying to make a decent living. The majority treat their tenants well and provide them with a decent, well-maintained home to live in. This is not a free service. And tenants do not expect to be provided with a roof over their heads for nothing. 

The other consideration is that many banks are granting mortgage repayment holidays of both interest and capital as easily as the government suggests they should.  So any measures need to be proportionate to both parties, not one-sided.  Ultimately, if the tenant is receiving furlough money – which assists the self-employed with accounts and those working – then they do have money to pay rent.  Yes, there are a few who fall through the cracks in the schemes quickly put together by the government because they pay themselves dividends or have only just set up their business, but by and large, tenants do have an alternative income. So the benefit of reducing income for landlords who still need to carry out repairs as well as keep on top of their commitments should be called into question.

We hope the Government will give due consideration to Labour’s proposals but two years to repay arrears will not be needed in the majority of cases. And Momentum’s “People’s bailout” should be treated with the contempt it deserves for being unbalanced and one-sided.

Arguably it could lead to tenants taking money from both sides and worsening the burden that all taxpayers will no doubt have to fund for years and years!  After all, not only is the possibility of tenant abuse when they are receiving furloughed monies too great, but the notion that rent arrears are just as easily collectible after two years as for six months is nonsense.

www.planetrent.co.uk

Why not READ our Property Blog too at www.ringleypropertyblog.co.uk

How long will the eviction ban last?

Lesley Davis Leave a comment
Some rent is better than none so talking to your tenants about rent arrears makes sense

The eviction ban could be extended beyond lockdown, according to Housing Secretary Robert Jenrick. So landlords hoping to replace renters in arrears with new tenants who can pay their rent on time are likely to be disappointed.

Anyone in rent arrears will not be forced out of their home as soon as the eviction ban is lifted. Instead, the Government is to develop what’s known as a “pre-action protocol” that will kick in when the ban is lifted to give renters “added protection”.  The aim is to put a duty on the landlord to act in good faith and try and find other solutions to tackle arrears before starting eviction proceedings.

Speaking to MPs in the House of Commons on Monday, Robert Jenrick explained that the new arrangements would apply at the end of the ban on evictions, which could be as soon as June but may be later in the year.

Right from the start of the evictions ban, landlords have been encouraged to engage with tenants facing financial problems due to the Covid-19 outbreak. Where possible, it makes sense to try to work out an affordable repayment plan so that renters can remain in their homes and landlords continue to receive at least some rent. This particularly applies where landlords are themselves benefitting from a mortgage payment holiday from their own lender. See our blog here to read what we think about this.

Our advice echoes what the Government is saying. The majority of landlords have good relationships with their tenants. Despite the lockdown, communication is vital. So why not reach out to your tenants, just to check-in on them, and let them know you are willing to discuss any problems they may have around their rental payments. Why go to all the hassle and expense of starting eviction proceedings further down the line, when a fair arrangement to pay back rent arrears could keep tenants in your rented property long-term?  

When the ban was announced in March, it sparked fears that there would be a surge of repossession orders in June once it was lifted. But why get involved in legal action at all? Talking to your tenants may be all that’s needed.

www.planetrent.co.uk

Why not READ our Property Blog too at www.ringleypropertyblog.co.uk