Wondering about the financial support available to Scottish landlords right now?
Although we’re now beginning to see the light at the end of the tunnel in terms of lockdown – at a time where landlords and tenants are communicating and supporting each other more than ever – it’s still fair to say that we’ve all taken a wee bit of a hit in one way or another.
Be it physically, emotionally, or financially, no-one’s really escaped entirely unscathed.
As the Scottish Landlord’s Estate Agent, we do our best to have your back as much as possible. During our recent Property Pow Wows (over Zoom) with landlords up and down the country, we’ve been hearing about how tough some of you have been finding it recently.
You may have tenants who have been affected by COVID and are unable to pay as much rent as usual – or you may be feeling the strain due to other related factors – and now find yourself dreading your next repair bill.
Hang in there; things will get better.
If you’re looking to maybe check out the financial support available for Scottish landlords post COVID-19, here’s what you need to know.
The PRS Landlord COVID-19 Loan Scheme
Let’s start with perhaps the most obvious bit of financial help being offered to landlords right now; the PRS (Private Rented Sector) Landlord COVID-19 loan scheme.
We know that although a lot of you (52.9% of you, according to our recent survey) may not be interested in getting into more debt right now, it is there if you’re struggling.
It’s a £5 million fund which offers interest-free loans to all private landlords to cover up to 100% of lost rental income during the COVID-19 crisis.
According to Housing Minister Kevin Stewart:
“We want to ensure no one loses their home during this unprecedented public health pandemic which is why we passed legislation to protect tenants against any eviction action for six months.
“This new £5 million loan fund builds on that action and offers landlords the same security as tenants, ensuring they have financial support if tenants struggle to pay rent because of coronavirus.”
For more information, check out the official government website.
Council tax: new student exemption
If you’ve experienced your student property being unexpectedly empty due to COVID, you should be eligible for the student council tax exemption, which was lobbied to politicians by SAL to help ease some of the pressure on landlords.
This temporary exemption applies to properties occupied by students prior to 17th March, 2020, and this exemption will end on the 30th September – although, it’s possible this date could be extended further.
More information can be found via SAL.
Business rates holiday for furnished holiday lets
If your furnished holiday let is available to let for at least 140 days a year, you’ll be eligible for non-domestic rates relief on your property. These reliefs are available to all non-domestic properties from 1st April 2020 right through to 31st March 2021.
Mortgage holidays for buy-to-lets
Bit of a controversial one, but mortgage holidays for landlords are available – just like they are for private homeowners. It’s essentially a temporary payment holiday offered by lenders, allowing you to pause your mortgage payments for up to three months.
Despite pausing your payments, interest will still accrue on your mortgage, meaning your payments and the interest you owe will slightly increase once the mortgage holiday is over – for the rest of the duration of your mortgage (just something to bear in mind).
However, our advice is that if you can at all avoid it, we’d recommend doing so, as we’ve now heard from various sources that this could have a negative impact on any future mortgage applications.
TIP: We’ve actually written quite a detailed blog on this topic: ‘Could Mortgage Holidays for Landlords Lead to Future Applications Being Rejected?’
Self-employed Government grant
If you’re self-employed and have been adversely affected by COVID-19, you may also qualify for the self-employed government grant scheme, the first grant of which covers 80% of your income for three months – as long as you claim on or before the 13th July 2020.
There will also be a second grant available from August 2020, this time covering 75% of your income for three months. You may apply for the second grant regardless of whether or not you applied for the first.
To find out more information, and check if you’re eligible to apply, you can visit the official government website.
Income tax deferral
Payments on account towards income tax for the tax year 2019/2020 – normally due to be paid by the end of July 2020 – have now been deferred until January 2021. This is automatic, so you won’t need to do anything for this to apply.
There’s also an enhanced ‘Time to Pay’ arrangement scheme, if you need any further help out guidance paying your upcoming bills. The dedicated helpline is: 0800 024 1222, and there is increased support for those worried about how COVID-19 will impact their ability to pay.
NOTE: If you’re VAT-registered, any VAT due between 20th March 2020 and 30th June 2020 will also be automatically deferred until 31st March 2021 – although you’ll still have to submit your VAT return as normal. (And you can still pay your VAT now if you wish)
The ‘bounce back’ loan
If you’re running your tenanted property (or short-term let) as a business or registered company, and have been adversely affected by COVID, you may also be eligible for the ‘Bounce Back’ government-backed loan – as long as your business was established before March 2020.
This loan allows businesses of any kind to apply for up to 25% of their turnover, and the maximum loan available is £50,000. There’s also no interest to pay for a year.
However, it’s worth noting that banks are not all dealing with this in one uniform way, and for some, you may require a business bank account to apply. The best thing to do is check with your bank, and also check out the info on the official government website.
Advice from the property pros
I was having a bit of back-and-forth with a landlord today who was voicing some concerns that they maybe weren’t in as good a place as their peers.
It’s so, SO easy to compare yourself to that landlord you know who’s always moving forward and investing in more properties, but it’s important to remember that not everyone’s thriving right now – and that’s okay, too.
If you’re in a difficult situation, it’s important to remember that you always have options. One of those options (aside from the ones above, and maybe a last resort for some) is thinking about freeing up some equity by selling your tenanted property.
But there are plenty of less drastic options, too. It really comes down to crisis management, and taking a long, hard look at your outgoings. I know one landlord we’ve chatted to recently has said this crisis has done wonders for cutting down on his expenditure! Which is a very positive way of looking at a less than ideal situation.
Remember, we’re always happy to chat and give anyone the benefit of our experience, along with some free, no-strings advice in terms of what your options are in terms of financial support available for Scottish landlords.
And I know I said this above, but it bears repeating; hang in there. Things WILL get better.
Thanks for taking the time to read, and I hope that you’ve found something in this blog helpful.
I know it’s not been an easy time for landlords (remember, I am one!), but there is financial support available for Scottish landlords right now, if you know where to look.
Check out some of the options above; click on the links to learn more and see if you’re eligible.
Still need some guidance in terms of your options? Thinking of releasing equity by selling a tenanted property? Get in touch with us today – we’ll be more than happy to help.
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email email@example.com