Each Hammersmith Landlord Could be Hit By a £52,850 Bill. And 5 ways on how all Hammersmith landlords can escape the worst of the coronavirus downturn on their Hammersmith rental property
With the second lockdown starting on the 5th November 2020, does this mean Hammersmith landlords can wave goodbye to their Hammersmith buy-to-let investment and see it go up in smoke on the bonfire of buy-to-let dreams, like a Guy Fawkes puppet?
With many Hammersmith tenants at risk of losing their jobs after the furlough scheme ends in March and as the reverberations of the Coronavirus recession hit this winter, what does this all mean for Hammersmith landlords and what can they do to mitigate the risks?
Since the spring, most Hammersmith tenants and buy-to-let landlords have been protected from the coronavirus crisis thanks to the banks with their mortgage payment holidays and job support schemes.
Before the second lockdown was announced on the 31st October, it was expected that as the furlough and mortgage payment holidays were due to end on Halloween, there would be some serious fallout from those schemes finishing. One silver lining from the lockdown (if you can call it that) is that mortgage payment holidays and furlough have been extended, yet does all that just kick the can down the road?
The question is, what can Hammersmith landlords do to mitigate the financial risk on their Hammersmith buy-to-let investment?
- Help Your Hammersmith Tenants Get the Financial Support They are Entitled To
- Adopting, Adapting & Improving Your Hammersmith Buy-to-Let Property
- Hold On to Your Good Hammersmith Tenants
- Carry Out Firmer Checks on Your Prospective Hammersmith Tenants
- Rent Guarantee Insurance for your Hammersmith Rental
The Nuclear Option - Eviction
Hammersmith landlords need to be conscious that, should their tenancy run into trouble, the Government have changed the rules when it comes to eviction during the coronavirus pandemic. Going into the first lockdown, there was already a backlog in the courts and now, just before going into the second lockdown, bailiffs have been instructed not to enter rental properties in high risk Tier-2 and Tier-3 Covid-19 areas.
Eviction really does have to be the very last option. Negotiation or arbitration will nearly always deliver quicker and improved outcomes for both parties. Hammersmith landlords who do come to mutually agreeable arrangements with their Hammersmith tenants by briefly reducing the rent, or allowing payment holidays with legally enforceable pay back schedules should ensure they get the agreed terms in writing and run by a solicitor or their agent (feel free to drop me a note if you need advice).
However, if eviction is required, it doesn’t mean the tenant gets off ‘scot free’. Evicted tenants, depending on their circumstances, will either be placed temporarily into an inexpensive B&B, asked to move in with family or given one of the local authorities temporary accommodation properties, with the goal to then move them into long term council accommodation (as the chances of obtaining private rented accommodation would be slim with agent’s heightened reference checks – more of that at the end).
The Potential Cost of Evicting a Problem Hammersmith Tenant
The average rent for a Hammersmith property currently stands at £2,542 per calendar month.
Thankfully, evictions are very rare. Last year before lockdown, tenants from 201.4 rental properties were evicted each working day in the UK ... but if yours was one of those, that is still a potentially large cost.
Working on the basis that most evictions from the first rent not being paid, through to eviction, refurbishment of the kitchen, bathroom, carpets and décor (because often these do need sorting/replacing) were taking on average between eight to nine months before Coronavirus hit, (plus the mortgage payments), this means a Hammersmith landlord could be hit by a £52,850 bill, broken down as follows:
|Missing rent (8½ months)||£21,607|
|Legal fees & court fees||£3,500|
What that would be now is be anyone’s guess – yet it could be a lot more.
This is why it is so important to get the best tenant from day one. Many Hammersmith tenants, who know they wouldn’t pass the references of letting agents, are attracted to those private landlords who don’t use a letting agency, as they know their referencing checks are not as strict and may be a softer touch. That’s not to say going with a letting agent is a guarantee you won’t need to evict; it just means the chances are much, much smaller. Like anything in life - it’s a choice.
Whether you are a Hammersmith landlord who uses a letting agent or not, and feels their reference checks are not to the standard or level you might hope or if you just want a chat about the best rental guarantee insurance, then give me a call what have you got to lose
Call Willmotts for property advice or information with property rentals, Lettings, email@example.com or call 020 8222 9958
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