Navigating Mortgage and Rent Challenges After Job Loss

Written for reallymoving by property expert Kate Faulkner.

Losing your job and putting your home at risk is probably one of the scariest aspects of Coronavirus for new and existing home owners, and renters. Not only is there the worry of becoming ill, but also of losing your job, and the impact that will have on your home.

However, rest assured there is a lot of help available, more than we have ever seen before.

For example, during the crisis:

1. Your landlord cannot evict you
2. Your lender cannot repossess your home

This is basically because the court system is being cut back substantially during this time, so, whatever happens, you are safe in your home for the time being.

However, it's important to understand the implications of the help available. It's being described as a mortgage or rent ‘holiday’, but that is not the case. None of this help is ‘free’, so whether renting or buying, you will have to pay back the lender or landlord for any missed payments.

What not to do

No holiday can take place without a lot of organisation and it’s the same to secure help with your mortgage or rent.

What you cannot do is just stop paying your mortgage or rent. If you have a problem and need financial help, you need to agree a plan with the lender, your landlord or letting agent. 
Below we have explained the help you can secure and how to go about securing the help you need.

Help for homeowners, landlords and those on benefits

Currently, there is enhanced help to everyone if you are sick, or lose your job, however these do vary.
You can find out more about the help available and how to access it on gov.uk under 'Information for individuals.'

It is considering ways to boost your income to afford your rent or mortgage, which would prevent you getting into debt.
 

How to claim help with your mortgage

Whether you're a homeowner or a landlord, it's possible to secure a ‘payment holiday'.

The downside of securing a payment holiday is that the money you owe will be ‘added’ to your loan, so you are likely to either end up paying more for your mortgage, extending the term or increasing future payments on a monthly basis. Not paying your mortgage is likely to cost you more in the long run.

Steps to securing help for your mortgage:

1. Check you are up to date with your mortgage payments, or you may not be able to access this support
2. If you organised your mortgage through a broker, contact them first as lenders are completely overwhelmed with calls currently
3. Ask and secure, in writing, that this will not affect your credit file
4. Provide what evidence you can. You can secure a sick note remotely from 111 or you should have a letter or email regarding loss of employment
5. Explore other options if required, for example interest-only payment or extend your mortgage term

To apply, check if your mortgage lender has an online option, such as Nationwide or contact the customer service helpline.

For a landlord mortgage holiday, your tenant will need to prove that they have fallen on hard times or are ill. Bear in mind too, that if the rent you charge is £750 a month but your mortgage is £500, you will only be able to defer the £500 in mortgage payments. 

For more information visit:
You can find more information at the Money Advice Service and if you're struggling with your Help to Buy interest repayments, there are payment holidays available for those too.
 

Help with your rent

Whether you are renting privately or via benefits, there is a lot of help available to you – and remember your landlord cannot evict you for three months from mid-March.

As with the ‘mortgage holiday’ the initiatives, if you don’t pay any rent over the coming months, this will have to be paid back. You also cannot just stop paying your rent – you need to talk to your landlord, provide evidence that you have income issues and agree a plan to pay the money back.

If you are on benefits, then your rent should continue to be covered, but if there is a shortfall because you also work and you have lost your job, there are two changes which may help you:

1. Over the next 12 months you will receive an additional £1,000
2. Local Housing Allowance will be linked to the 30^th percentile of rent rates in your area. If you have seen market rent rises over the last few years, this will be helpful, but won’t help people who haven’t seen large rent rises.

The Resolution Foundation website has more information on these measures.

If you are a private renter, being open and honest with your landlord or estate agent is very important - they are not obligated to get a mortgage holiday, but they legally cannot evict you, so the best approach is to try to work together to find a solution. 
  The gov.uk website has more information on evictions and tenancy support. 

Please note: This information regarding the moving industry and Covid-19 was accurate at the time of publication (26.03.20 at 15:00 hrs). Government recommended action is changing constantly, and we will endeavour to keep these articles up to date.