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CORONA VIRUS – WHAT ARE THE RULES AROUND EVICTIONS?

When the coronavirus first started it was made illegal for landlord to evict their tenants throughout England and Wales. Last week the ban on evictions was extended till 20th September.

An eviction is a process a landlord must follow if they would like to seek possession back of their property and would like the tenant to leave. They may want to do this for a number of reasons

  • The landlord may want to sell the property
  • The landlord may want to move into the property
  • The tenant maybe in breach of their tenancy agreement

 

Whatever the reason the landlord must go through the proper eviction process.  In order to start the process, the Landlord must either issue a ‘Section 21 notice’ or a Section 8 notice’. A section 21 is also known as a non-fault eviction whereas section 8 notice should be issues when the tenant is in breach of their tenancy agreement. In the case of a section 8 notice the landlord must specify why the tenant is in breach.

However, although the tenant may have received notice to vacate the property there is still no guarantee they will leave on the specific date. If the tenant fails to leave, then the landlord will have to apply to the courts for possession of their property and this is when it can get expensive. Therefor it is a lot more beneficial for the landlord if the tenant vacates before it gets this far.

 

As explained above at the start of the pandemic evicting a tenant from a property was banned. This was enforced by the government because they wanted to protect all those tenants who suffered from loss in income from being made homeless. Initially the ban was up until 25th June, however this has recently been extended to 20th September. Furthermore, after the 20th September a landlord must give a tenant at least a six-month notice period whereas previously it could have been as little as 2 weeks for some breaches of the tenancy agreement.

Due to the governments new rules regarding eviction there is the chance of landlords been exposed to tenants not paying their rent for a considerable amount of time. If this is the case, then there is the option for the landlord to apply for a payment holiday from their respective lender to ease some of the pressure.

Support is also available if for example the tenant has lost their job or had their hours reduced. In these instances, the tenant has the option to apply for housing benefit or universal credit, whichever applies.

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Customers Should Still Be The Priority

It is reported that thousands of agents across the Country have been sent home due to Covid 19 like a large percentage of people across all industries. A few agents are still working however, the majority have been furloughed under the scheme set up by the government, meaning branches all across Britain have been closed. However, the main question at the moment given the uncertainty is how many will re-open?

The terminology furloughed basically means that staff are at home but not working and that’s the main difference from been made redundant as they are able to return to their job. Under the scheme individuals are able to claim 80% of their normal salary from the government, up to £2,500 a month and this as it stands does not have to be paid back at anytime.  

Although you can understand why estate agents have taken this measure to reduce their overheads as much as possible during these times, have many acted too rationally leaving their businesses exposed to offering bad service.

Granted there isn’t going to be many people wanting to place their house on the market at the moment and viewings can also only be done virtually so will be significantly lower to normal. However, there are those customers who have agreed a sale on their property and therefore require a high level of customer service, probably more than normal.

The government recently announced that people should put any move on hold unless they have exchanged contracts. I believe people who have agreed a sale will require more attention than they normally would. We all know 99% of the articles we read at the moment is negative news so surely it is imperative that agents try to keep both vendor and their respective buyers as positive as possible. If one of the parties allow the negativity to take over their mind there is a strong chance they pull out of the transaction. Furthermore, banks are under an enormous amount of pressure at the moment so having an agent on hand on completion date may also be more important than normal in case there are issues with the lender releasing the funds.

Here at FastMove we can tell you first-hand this has happened once already within our business. We had a completion set for last Friday, with all parties packed up vans booked etc. However, the monies for one of the buyers never arrived from the bank leaving everyone immensely anxious and frustrated. As we are still operating with a high percentage of staff, we were able to speak to everyone concerned to put plans in place and get over the issues. However, we cannot say the same for some of the other estate agents and solicitors in the chain. There respective vendors ended up calling us for updates and guidance as they were unable to get through to their agent or solicitor. We will not mention their names for professional reasons but would gladly clarify if you want to call us.

It’s because of the above agents may find they have reacted too quickly by furloughing too many of the staff leaving their business in a vulnerable position. It only takes one transaction to go wrong to have a huge impact on the agent’s reputation. Therefore, before agents decide on their structure during these hard times they may want to sit down a spend sometime as to how many staff they are going to need to ensure their service standards are maintained.

At the moment the scheme lasts until the end of May but I am sure the government will re-address this if things take longer to return to normal.

Let’s hope whatever the agents put into place they are all able to re-open their doors in whatever level of capacity.

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Why You Shouldn’t Let Covid-19 Stop You From Buying Your Forever Home?

You switch on the TV, you load up Facebook, you start a conversation with your partner, I guarantee the first word you will see or say is ‘Corona’ and it won’t relating to the lager.

Yes, Coronavirus is all people seem to be talking about at the moment, it has literally taken over the world.

It is also having a huge impact on people looking to buy a new home or even their first home which in turn is having an impact on all sellers.

A lot of the anxiety rests with people who have already committed to purchasing a property. For example, if the Prime Minister locks the Country down completely where is that going to leave people, especially the ones who have agreed dates, removals etc. Even worse the ones who exchanged contracts a couple of weeks ago with a completion date imminent.

It’s because of this, solicitors have been advised by the law society to be very careful when setting dates. They have emphasised the importance of ensuring exchange and completion occurs on the same day when there are only two parties in the chain and only have a day between the two events with chains slightly longer. This is reducing the risk of people been locked into a contract they cannot adhere too if the Country was to be put on lockdown or the possibility of a party in the chain contracting the virus and thus have to go into self-isolation.

As well as the above causing disruption in the industry due to the aforementioned reasons there is no doubt people are going to be scared about the market in general. For example, are property prices going to crash or at least how far are prices going to drop?

If you are in the purchase for the short-term i.e. you plan to sell in two years or it’s an investment where the plan is to renovate and sell for profit, then I can totally understand the anxiety. However, if you are buying your next family home and plan to be there for a while then you have less to worry about. Yes there is a chance property prices will drop over the next month’s but one thing is for sure, they will climb back and if you take a 10 year view the property you are looking to purchase will more than likely be worth more than what you have agreed to pay for it today.

Furthermore, the interest rate currently stands 0.1%, the lowest rates have ever been. Granted lenders have not yet made changes to their fixed rate products to reflect this but this will probably be only a few days away. Therefore, if your purchase is a long-term view now is the time to borrow money and fix the rate for as long as possible.

Obviously there maybe the uncertainty with your jobs at the moment. However, there is help at hand from the mortgage companies who are generally granting three-month holiday periods, which you can use to your advantage.