Government Help – Covid-19 Pandemic

This guide looks at the important things everyone should know about government help  to people and businesses – aimed at mitigating the impact of the Covid-19 coronavirus pandemic.

The guide looks at the measures that help businesses and people in general. Further, it looks at the property-based provisions that help homeowners, tenants and landlords.

Guide prepared on the 21st March 2020

SECTIONS:

1  Staying at home

2  Off work sick

3  Help with wages

4  Miscellaneous concessions and benefits

5  Homeowners, tenants and landlords

1  Staying at home

 ♦When to stay at home

The UK government’s guidance as to staying at home states:

If you have symptoms of coronavirus infection (COVID-19), however mild, stay at home and do not leave your house for 7 days from when your symptoms started. (See the stay at home guidance for more information)

Your employer wants you to come in to work even though you feel ill

If your employer wants you to come in to work, the government’s guidance states:

Employees should take time off work if they are ill. Government is clear that employers should support their staff’s welfare, especially during an extended response.

sign up blue 2

♦What do you do if you don’t have a sick note?

If your employer wants you to come into work and you don’t have a sick note, the government’s guidance is:

Employees should take time off work if they’re ill.

By law, medical evidence is not required for the first 7 days of sickness (that is, employees can self-certify). After 7 days, it is for the employer to determine what evidence they require, if any, from the employee. To make it easier for people to provide evidence to their employer that they need to stay at home, we are developing an alternative form of evidence to the fit note. These will shortly be available through NHS online.

In the meantime, we continue to urge employers to respect the need to stay at home where they are following government advice to do so and to show flexibility in the evidence they require from employees.

Download your FREE Property Buyer’s Checklist here.

♦What if your employer does not believe you need to be at home? Will you risk losing your job?

If your employer does not believe you need to be at home or you risk losing your job, the guidance of the government is:

Employees should take time off work if they’re ill.

By law, medical evidence is not required for the first 7 days of sickness (employees can self-certify). After 7 days, it is for the employer to determine what evidence they require, if any, from the employee. To make it easier for people to provide evidence to their employer that they need to stay at home, we are developing an alternative form of evidence to the fit note. These will shortly be available through NHS online.

In the meantime, we continue to urge employers to respect the need to stay at home where they are following government advice to do so and to show flexibility in the evidence they require from employees.

rebel property coach

Off work sick

♦Entitlement to sick pay

If you are off work sick as a result of coronavirus you will be entitled to Statutory Sick Pay from day 1 instead of day 4

Zero Hours contract

If you are off work sick check with your employer if you are entitled to Statutory Sick Pay. Read your contract.

If you are not entitled to Statutory Sick Pay you may be entitled to:

  • Universal Credit or
  • Employment and Support Allowance (ESA).

♦Self-employed

If you are self-employed and off work sick, you can apply for Universal Credit

♦The whole family has to stay at home

If the whole family has to stay at home and there is no household income, you can apply for Universal Credit.

Gifted-Deposit-3-things-you-must-do-when-gifting-a-deposit-136-v6

3  Help with wages

On the 20th March 2020, the government announced that it will pay 80% of the salary of employees unable to work due to the coronavirus pandemic. This covers gross wages up to £2,500 per month.

It is understood that the provision covers employees who have already been laid off, provided they are re-employed and granted leave of absence.

4  Miscellaneous concessions and benefits

The government has brought in a wide range of concessions or benefits to support businesses and workers adversely affected by the coronavirus pandemic. They include:

  • Vat payments deferred until the end of June 2020
  • Self-assessment income tax payments due in July 2020 deferred to January 2021
  • A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • The HMRC Time to Pay Scheme.

Fuller details of these and other concessions and benefits can be found in the government’s guidance Covid-19 Support for Businesses.

img94joktmu714279

5  Homeowners, tenants and landlords

Protection for homeowners with a mortgage

If you have a home mortgage you may be entitled to a 3 month “mortgage holiday” if you are unable to pay your mortgage due to the coronavirus crisis.

You need to apply for the concession

To get the concession you must apply for it in line with the procedures and criteria of your lender.

It is not a freebie

It is worth stating that the mortgage holiday is not free money. You are not given any money. You will simply be given the right not to pay your mortgage for an agreed period of time – up to 3 months. The amount you don’t pay will remain outstanding.

Lenders will add the amount unpaid to your total mortgage debt and that will likely lead to an increase in your monthly mortgage payments when they start after the payment holiday.

How to deal with mortgage debt (practical systematic ways to prevent eviction)

The concession may not be automatic

Lenders are currently saying that the concession is not automatic and not everyone who applies will get it.

Clearly the concession is for people unable to pay their mortgage as a result of the crisis.

♦Making use of the protection for homeowners with a mortgage

Find out how your particular lender is applying the concession

You should go online to see what your particular lender is saying.

If you are being adversely affected by the crisis, you can apply for the concession now.

Some lenders require that you make the application by phone. With others there is an online form. As time goes by, the lenders may well standardise their procedures.

Newspapers are reporting that borrowers are finding it extremely difficult to get through to lenders by phone at the moment. Remember that it is possible to contact lenders by email or post.

Credit-Score-Meter

Impact on your credit file

The indications are that applying for a mortgage holiday will not adversely affect your credit file or score.

You have alternatives to the 3 months mortgage holiday

You should note that the 3 months mortgage holiday is not the only way you can get help if you are having difficulties with your mortgage payments.

Other options include:

  • Extending your mortgage term
  • Switching from a repayment only mortgage to an interest only mortgage (typically for a limited period only)
  • Switching to a mortgage with a lower interest rate.

If you speak to your lender and/or an Independent Financial Adviser, IFA, you can identify the option most suitable for you. That is highly advisable if you wish to gain maximum financial relief.

mortgage faq

Mortgage payment holiday calculator

A mortgage payment holiday calculator can be found  at this site.

If you are in mortgage arrears now

Lenders have announced that they will not apply for possession proceedings in the 3 months from 19th March 2020.

Will your mortgage kill you? (the importance of having a big mortgage reserve)

Mortgage insurance

Check whether you have mortgage insurance which will cover your mortgage payments.

♦Protection for private and housing association tenants

The government has promised to help private and housing association tenants during the current crisis.

3 months rent holiday

If you are a private or housing association tenant, it has been announced that you will be protected from eviction for 3 months if you are unable to pay your rent as a result of the crisis.

Download your FREE Property Buyer’s Checklist here.

Legislation will set out the details

Emergency legislation will set out the full details of the concession, but the broad likely effect of the planned legislation seems to be:

  • Private and housing association tenants will be protected from eviction for 3 months
  • Landlords will not be able to serve an effective notice or start court proceedings during the 3 months
  • After the 3 months “landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances”: Ministry of Housing Communities and Local Government.

Goal of the legislation

The government’s announcement does not mean a tenant’s rent liability is wiped out. The goal is to protect tenants from eviction where they are unable to pay their rent due to the pandemic.

Full details of the protection for tenants will only be known once the planned new legislation comes into force.

What-is-a-Tenant_-Real-Estate-Term

♦Protection for council tenants

If you are a council tenant, you are likely to have similar protections to those announced for private and housing association tenants.

However, the new legislation should make things clearer.

♦Protection for buy-to-let landlords

The government has announced that the 3 months mortgage holiday given to homeowners will also apply to buy-to-let landlords with mortgages.

The apparent aim of the concession

The apparent goal is to ensure that BTL landlords don’t get into difficulties with their mortgages as a result of tenants not being able to pay their rent due to the pandemic.

Expected features of the concession

Final details of the concession will not be known until the government enacts emergency legislation. However, announcements suggest that:

  • Landlords will be able to self-certify that a tenant is unable to pay rent on account of the crisis
  • The rent holiday given by the lender will defer mortgage payments for up to 3 months
  • The unpaid mortgage payments will be added to the landlord’s mortgage debt to be paid at a later date.

Outline of coaching benefits

Protection for tenants and landlords

The provision will protect tenants against landlords and will protect landlords against lenders. It amounts to the government micro-managing the relationship between landlords and tenants for a short period in exceptional circumstances.

The risk of arrears will remain 

Landlords should be aware that this provision will not remove the risk of arrears. It will make the consequences of arrears more manageable for landlords and tenants.

Prudent landlords should budget for higher than normal arrears during the crisis.

Download your FREE Property Buyer’s Checklist here.

♦Other protection for buy-to-let landlords

Other options for landlords finding it difficult to make mortgage payments

As well as the 3 months mortgage holiday, other options may be available to landlords having payment difficulties, including:

  • Increasing the mortgage term
  • Moving from a repayment mortgage to an interest only mortgage
  • Switching to a mortgage with a lower interest rate.

The 3 months rent holiday for tenants

Landlords will be impacted by the protection against eviction given to tenants as a result of the 3 months rent holiday for tenants having difficulties paying rent. See above “Protection for private and housing association tenants”.

The key thing about the rent holiday is that it provides a framework in which landlords and tenants can manage rent arrears during the crisis. In many cases, arrears will be as a result of genuine inability to pay by the tenant. Such a tenant is perhaps likely to pay the outstanding arrears over time.

Details of free buyer's checklist download

Keep an eye out for other concessions

The RLA is currently seeking to secure further concessions to help landlords weather the crisis. Keep an eye on the RLA’s website for developments.

♦Reduction in the Bank of England’s base rate

On the 11th March 2020 the Bank of England reduced its base rate from 0.75% to 0.25%. On the 19th March 2020 the rate was reduced again to 0.1%, an all time low.

The reductions should reduce the mortgage payments of borrowers on variable or tracker rate mortgages.

Disclaimer: This guide is provided for your information or education only. It is not legal or other advice for you to rely or act on. Where you need legal or other advice you should formally instruct a suitable expert, providing full details of your specific circumstances, enabling you receive specific advice pertinent to you.

Dalton Barrett
Rebel Property Coach

About the author

Dalton Barrett is a solicitor, conveyancer, investor, PRS registered property coach and best-selling Amazon author. Read about his unconventional worldview of property here

Please share this blog

Enjoyed this blog? Please share it with friends by clicking on the LinkedIn, Twitter, Facebook or Instagram icon on this page.

Subscribe

If you have not signed up to get my latest blogs sent to you weekly, please do so HERE

Follow

Please follow me on Twitter @Dalton1London
You can find me on FacebookInstagram and YouTube
Please link up with me at LinkedIn

Website

My website is: www.rebelpropertycoach.com


ADVERTISEMENTS

Leave a Reply

Your email address will not be published.