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A Bristol lettings agent is calling on landlords to apply for mortgage repayment holidays and to pass on the saving in outgoings as rent holidays to tenants. This, he claimed, is a way of avoiding a ‘toxic dynamic’ taking hold, where tenants are evicted and local landlords lose out on rental income.
Many people in Bristol have lost their income due to the lockdown and are now struggling to pay their rent. As a result, landlords struggle to keep up with mortgage payments because rent money is not coming in’, said Rent Happily founder Boris Drappier.
‘If we don’t fix this problem fast, we will face an unprecedented housing crisis that will cause massive distress to tenants and landlords alike. But if landlords get mortgage holidays and pass these onto their tenants as rent relief, both will see it through unscathed’.
A third of the firm’s tenants have seen their income dwindle and are currently struggling to pay rent, claimed Drappier.
Under normal circumstances, landlords could claim rent arrears, go to court pressing for evictions, and look for new renters to replace the previous ones. But these are not normal times and all court action for evictions is on hold until at least 25 June 2020. Once the eviction moratorium is lifted, the courts could be flooded with cases. It could take years to clear the backlog.
Some preventative action is needed, said Drappier. Landlords are more likely to get their rent in the long run if they make sure tenants don’t accumulate rent arrears they will not be able to afford. And they can do that by passing on mortgage payment holidays to their tenants as rent relief, he said.
The cost to a landlord of taking a mortgage holiday is very little and can be added to the rent at a latter date. ‘In this scenario, no one is worried about chasing rent arrears or being evicted, and everyone gets a payment holiday at a very low cost’.