As the weeks pass us by, it’s starting to become increasingly obvious that the disruption caused by the COVID-19 pandemic is having a significant impact on both the UK economy and housing market. With lockdown policies having a negative effect on current economic activity, landlords might be wondering how the current situation affects any existing tenancy agreements, in regards to aspects of repair and maintenance work being carried out within the property, and just how COVID-19 could affect the rental market in the future.
An Expected Rise of Tenants in Receipt of Benefits
According to official figures, the number of people in the United Kingdom claiming unemployment benefits during April increased by the most in one month since records began almost fifty years ago, reaching almost 2.1 million. The Office for National Statistics also reported approximately 856,500 people signed up for Universal Credit and Job Seeker’s Allowance benefits in April.
This dramatic increase in unemployment would have been much higher without the government’s intervention and the introduction of the Job Retention Scheme. However, the reality is that hundreds of thousands of people are now unemployed or facing potential unemployment in the near future. Because of this significant sharp rise in unemployment, over the coming months, we are likely to see an increase of tenants in receipt of benefits.
This news should not worry landlords as most insurance companies have agreed to allow you to amend your landlord insurance policy with no change to the policy terms or price if your tenant has started receiving benefits due to the COVID-19 pandemic. It is also completely possible for landlords to get suitable buildings and contents insurance if they wish to let their properties to tenants in receipt of benefits.
If you do wish to evict your tenant during the Coronavirus outbreak you must follow proper procedures. Meaning that:
- You cannot lock your tenant out of their home, even temporarily.
- You must give 2 months notice of termination of the tenancy agreement.
- If the tenant refuses to leave you must get a court order.
- If the tenant still refuses to leave after the court order expires you will need to get a bailiff warrant to evict the tenant.
Rental Property Maintenance During the UK Lockdown Period
Whilst we are in this period, landlords are required to carry out essential repairs only. This includes any repairs required to utilities, annual gas safety checks and pest control. Any non-essential work should not be carried out during this time, such as tenancy inspections.
Social distancing guidelines should be followed on all visits by any landlord or representative tradesperson visiting the property and if the tenant is self-isolating, the landlord should assess the situation and follow public health advice such as the use of full PPE.
The Predicted Recovery of the UK Housing Market
Whilst it may be too early to determine the full impact of COVID-19 on both the economy or the UK property market, the good news for any potential property investors is that the effects are not expected to be long-lasting. In the first month of 2020, the housing market was displaying signs of strong growth, with an increase in sales and prices across the UK. Economists are forecasting a return to this within a few months if the lockdown measures do not persist.
Ashburnham Insurance are specialist providers of insurance policies for landlords We can cover residential properties let to tenants, houses of multiple occupation (HMOs), commercial let properties amongst others. Whether these buildings are a small privately-owned investment or a full-time business, we have the right cover for you.