Landlords: Are you affected by the COVID-19 coronavirus outbreak?


Published: 18th March 2020

Landlords: Are you affected by the COVID-19 coronavirus outbreak?

With property prices increasing for the fourth consecutive month in February, the future looked
bright for landlords up and down the country. However, the explosion of the coronavirus outbreak
which has now found its way to our shores has cast a huge shadow across the buy to let market, and
landlords are left fearing the worst.

Letting through Airbnb can often be an extremely lucrative endeavour; however, its success relies on
two major markets – those travelling for leisure and those on business trips. When the coronavirus
crisis first hit, the travel sector was one of the first to be impacted. Holidaymakers were hesitant to
arrange trips under growing uncertainty, while businesses curtailed external gatherings in an effort
to limit the spread of the disease amongst their workforce, encouraging virtual meetings and
conference calls as an alternative. As a result the demand for short-term and overnight rentals
plummeted.

It is not just those letting through Airbnb that are braced for a drop income, however. With
universities across the country poised for potential closure, the student let market is also in a
potentially perilous position. Many lecture theatres have already been closed with classes moving to
virtual environments in an effort to limit social contact between students. While many university
campuses are still open, the future remains unclear with government intervention to close schools
and holidays a very real possibility. With no need to remain on campus, many students are likely to
make the decision to return to the family home rendering their student accommodation surplus to
requirements. Should this crisis drag on into the new academic year the prospects for student
landlords could be catastrophic.

Additional problems could also be on the way for landlords as the government has bowed to increasing
pressure to provide tenants with protection should they default on their rent at this time. Emergency legislation has now put a complete ban on evictions for both social and private renters for a period of three months. This could leave landlords in a perilous position whereby they are faced with receiving reduced income from tenants, while their mortgage payments and other outgoings remain
constant.

While homeowners have been offered mortgage payment holidays of up to three months should
they experience financial difficulties as a result of coronavirus, this initiative has not been extended
to landlords with buy to let properties leaving them with no recourse should the worst happen.

Compounding the problem is that no one knows for sure how long the situation will continue, nor
what the future will look like once the epidemic eventually passes. Estimates vary between experts,
making it extremely difficult to plan ahead with any degree of certainty. While landlords may be able
to cope with a few weeks of vacancies, should this stretch into several months, the situation may be
too much for some. With income taking a sharp plunge, yet overheads and outgoings remaining
constant, many will find themselves in dire straits and in need of professional help.

Begbies Traynor can provide expert guidance, advice, and comprehensive support to landlords who
find themselves facing financial distress as a result of COVID-19. With a network of business rescue,
recovery, and turnaround experts located across the country, you are never far from specialist help.


About the author

Thomas Mckay

Partner

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Thomas joined Begbies Traynor in 2005 and has significant experience in the advisory and restructuring sector. He has acted in borrower and national mainstream Bank engagements, providing turnaround and strategic advice in a vast amount of both solvent and insolvent capacities.

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