Landlords will not be able to evict people who fall behind with their rent for three months under new emergency legislation.

Coronavirus: Get the latest property news and information

Emergency legislation is being introduced to protect renters impacted by coronavirus from being evicted.

The new law will mean no eviction proceedings can be started against tenants for at least three months, even if they are unable to pay their rent.

Buy-to-let landlords will also be able to apply for a three-month mortgage payment holiday to ensure no unnecessary pressure is put on their tenants.

Housing Secretary Robert Jenrick said: "The Government is clear - no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts."

The move comes the day after the Government was criticised for announcing a three-month mortgage holiday for homeowners, but not putting in place similar measures to help for renters. To date, there are no plans for a 'rent break' for those renting. 

How does it work?

As with the three-month mortgage holiday, the scheme enables tenants to defer paying rent, not get out of paying it altogether.

Once the three-month period is over, landlords and tenants will be expected to work together to establish an affordable repayment plan which takes into account the tenants’ individual circumstances, the Ministry of Housing, Communities and Local Government said.

It has also issued guidance asking landlords to show compassion and allow tenants to stay in their homes wherever possible.

Who is protected from eviction?

The legislation will cover tenants in both private and social rental accommodation.

It has not yet been enacted, but the Government said it would be taken forward as an urgent priority. 

Renters to be protected from eviction: woman sees news

What about landlords affected by coronavirus?

Although the three-month mortgage payment holiday initially excluded buy-to-let mortgages, the Government has now announced the scheme will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus.

As with homeowners, interest will continue to be accrued during the period and the missed payments will need to be made up during the rest of the mortgage term.

Why are the measures needed?

More than 20 million people live in rented accommodation in England alone.

Housing charity Shelter estimates that without decisive action tens of thousands of renters would have faced eviction.

The announcement also creates parity in the support available for homeowners and renters, as well as between residential and buy-to-let mortgages.

Are any other homeowners benefitting from government support?

The Government also announced today that people who had bought a home through the Help to Buy equity loan scheme will be offered interest payment holidays if they are struggling as a result of the coronavirus.

The initiative enables people to buy a home with just a 5% deposit, which the government tops up with a 20% equity loan. The loan is interest-free for the first five years, after which homeowners have to pay monthly interest on the outstanding amount.

Top 3 takeaways

1. Emergency legislation is being introduced to protect renters impacted by coronavirus from being evicted

2. The new law will mean no eviction proceedings can be started against tenants for at least three months even if they are unable to pay their rent

3. Buy-to-let landlords will also be able to apply for a three-month mortgage payment holiday to ensure no unnecessary pressure is put on their tenants

NEWS UPDATE 19 March 2020: The Bank of England has cut interest rates again from 0.25% to 0.1% in an emergency move sparked by the coronavirus pandemic. 

It is the second cut in interest rates in just over a week, bringing them down to 0.1% from 0.25%.

Interest rates are now at the lowest ever in the Bank's 325-year history.

The Bank said it would also increase its holdings of UK government and corporate bonds by £200bn as an effort to lower the cost of borrowing.

The Bank's Monetary Policy Committee voted unanimously to reduce interest rates. In a statement they said: "The spread of Covid-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large, but should be temporary. The role of the Bank of England is to help to meet the needs of UK businesses and households in dealing with the associated economic disruption."

You may also be interested in…

Zooplomas are our free guides to buying and renting a house, giving you expert advice and information straight to your inbox. 

Sign up to your Zooploma

  

The information and data in this article was correct at the time of publishing and every attempt is made to ensure its accuracy. However, it may now be out of date or superseded. Zoopla Ltd and its group companies make no representation or warranty of any kind regarding the content of this article and accept no responsibility or liability for any decisions made by the reader based on the information and/or data shown here.
* DISQUS *
comments powered by Disqus