The Rights, Obligations & Responsibilities of tme 2,105 Carlisle Landlords & 5,199 Tenants During the Virus Outbreak

The last three or four weeks, unquestionably, have been one of the most life-changing times we have seen since WW2. The imminent threat of the Coronavirus has taken over the world, the UK and Carlisle and will challenge you, our families, our relationships and test us all.

The drive of this worldwide action of social distancing is not just to stop you from getting ill with the virus; the bigger drive is to slow down the development of this virus so the NHS will not become overwhelmed with those who are most likely to need hospital care. Yet the issue of social distancing has certainly raised many questions around the landlord/tenant/agent relationship, so in this article I wanted to share with all the 2,105 Carlisle landlords their rights, obligations and responsibilities to their Carlisle tenants. I also wanted to highlight the rights, obligations and responsibilities of the 5,199 Carlisle tenants in return.

These will be trying times for Carlisle landlords and Carlisle tenants alike, so let’s start…

A landlord has the responsibility to ensure the property is fit for habitation, so what if the Carlisle landlord/agent is incapable of undertaking an emergency repair (or say the annual gas safety check) because the tenant is self-isolating or actually has the virus? The answer is the landlord should use their best efforts to fix the problem if it’s an urgent repair, yet if the landlord/agent are unable to do so they should record this fact and that it is related to the Coronavirus epidemic. One should then re-try as soon as is possible and appropriate, having full respect for information on self-isolation, personal-safety and social-distancing and ensure that you make a written note for future issue. My advice is that you or your agent (as we are with our Carlisle tenants) need to uphold good lines of communication with the tenants touched by these current circumstances, so they are clear on what action you are taking and the timescales for this.

Yet at the same time, there will be very few situations in the coming weeks when the contractors who the landlord/agent use will also be in self-isolation, meaning a handful of the 5,199 Carlisle tenants might have to wait for repairs to be sorted. We have some excellent Carlisle contractors with their own backup plans and so together we will use our best endeavours to find an alternative contractor to fix any issues. If your agent has issues, then maybe we can help – do call me. Yet whatever you do, if this occurs, document everything and that it is related to the Coronavirus epidemic.

The total rent paid by Carlisle tenants each month is £2,661,900

It’s true the UK government has demanded that building societies and banks give a three-month mortgage holiday to those landlords that are unable to make mortgage payments. This is not free cash, the mortgage payments are basically postponed with interest to be collected at the end of this crisis, meaning your obligation as a Carlisle tenant to pay the rent still exists. HM Government is offering employers an 80% wage support with the furloughing to avoid having to make people redundant.

The average Carlisle rental payment currently stands at £512 per month

Therefore, if you are incapable of being able to pay your rent, the first thing to do is speak with your agent or landlord if they self manage. Rent will still build up and accumulate during this virus predicament and you may want to negotiate a payment plan to pay it back on top of your normal monthly rent.  One option, subject to status and agreement by all parties, could be to renegotiate a new longer lease to pay off the arrears over a longer period. Again, the point here is communication from all sides – making sure there are no nasty surprises. A second option would be to ask your landlord to transfer your deposit to rent. The landlord or agent will need your written permission to do this. Please be fully aware that you are still responsible to exactly the same extent in the tenancy agreement for all breaches of Tenancy, dilapidations and rent arrears so you still need to ensure you adhere fully to all terms of the agreement as money will still be payable at the end of Tenancy for any breaches / dilapidations due.

So, if you are in this predicament, there is a lot of help accessible from the HM Government including Universal Credit or Employment Support as soon as possible to escape any interruptions to your payments. Remember, your landlord will need proof of your Universal Credit or Employment Support claims to give to their mortgage company to be able to start the mortgage holiday, so my advice to all the 5,199 Carlisle tenants is keep in contact with your agent to ensure your Carlisle landlord doesn’t suffer any avoidable hardship (which ultimately may end up with your home being repossessed because the mortgage payments were missed because you were unable to furnish the landlord with your own claim documents).

Communication is the #1 priority here. Whilst most agent’s premises are closed including our own, all are open for telephone and email enquiries, with staff working from home. This is a fast-changing time for everybody, for the 2,105 Carlisle landlords and 5,199 Carlisle tenants correspondingly and we will be ever vigilant to oversee the financial and monetary backdrop in the coming months.

The UK Government has announced a package of benefits in recent weeks. Employees and their families should access information via the Direct.gov website. A summary of specific measures put in place recently can be found below:-

Welfare Benefits

Universal Credit – Chancellor has announced that Universal Credit will be increased by £1,000 per year for the next 12 months.

Other benefits may be available – a simple online check can be undertaken to determine what benefits you may be entitled to: https://www.entitledto.co.uk/benefits-calculator/Intro/Home?cid=f436a549-5374-4728-9cb2-31bd9c4b2c0a

Water Bills

Although Water is supplied by a regional selection of water companies, who have not yet all confirmed what help is available, their Regulator, Ofwat, have assured people that they are expecting firms will offer payment holidays, and moreover, some water providers are running a scheme for those who have built up large debts, where the utility provider will contribute £1 for every £1 you pay towards the arrears. Please speak to your water provider for more details.

Gas and Electricity

The big six energy suppliers have said that they are likely to push back bill dates for customers who have been affected by the Coronavirus or remove debt charges for late payments. Each case will be reviewed on an individual basis, although the support particularly applies to vulnerable customers.

These are going to be tough times for the people of Carlisle (and the world), financially and mentally; yet together we will come out of this stronger. By working together, working in partnership, again keeping lines of communication open with regards to your finances and your housing, by keeping safe and protecting our families and most of all by being kind to each other … we will get through this, a little battered and bruised – yet hopefully better human beings for it?

Carlisle Homeowners £802,655,800 Windfall Since 2014

In the latest, and most recently published, set of UK mortgage data (for the month of November 2019) 18,470 pound-for-pound re-mortgages were made (i.e. the borrower went from one rate to another with no additional borrowing).

However, since the 1970’s, the British have seen their homes as cash cows and cash machines, with many homeowners re-mortgaging at the end of their mortgage’s introductory term (usually after the initial two, three or five years) to avoid being passed on to their mortgage lender’s more expensive standard variable rate.

For some borrowers re-mortgaging allows them an opportunity of raising additional cash whilst for others it enables them to follow interests and activities; such as big holidays, home improvements, new cars, debt consolidation or financially helping family members (e.g. paying off credit cards or helping with house deposits).


Interestingly, in November 2019 alone (the most recent figures) an eye watering £957,856,700 was borrowed on top of existing mortgages by 18,610 UK homeowners re-mortgaging and borrowing, on average, an additional £51,470. Therefore, one has to ask, are we borrowing too much? Looking at these numbers, one might think we are over-extending ourselves, yet as regular readers of my blog about the Carlisle property market will know – I like to drill down and look at the historical figures. Back in 2006, just before the crash, British homeowners were actually borrowing in excess of £5bn per month over and above the re-mortgage amount – much more than the £1bn we experienced in November!

Looking at statistics from the Bank of England for the UK as a whole, even with the data mentioned above, British property owners have increased the equity in their homes by just over £270 billion since 2010 compared with a £275 billion withdrawal during the 2000s. This reveals that the last decade (the 2010’s) is the first since records began in which Brits have increased their equity. This is partly due to the fact that the number of housing transactions crumpled during the Credit Crunch, and many homeowners chose to reduce their mortgages, rather than continually increasing them – even if their property started going up in value after 2013.

So, what has happened in Carlisle regarding mortgages and does it match the national picture? Well interestingly…

Carlisle homeowners have injected over £800m into their Carlisle properties over the last six years; overturning a trend stretching back to the 1970s.

Considering the exact figures, it can be seen whilst the total value of mortgages has increased slightly since 2014, as a percentage this has gone down, meaning Carlisle homeowners and Carlisle landlords have increased their equity since 2014 by £802,655,800 (one might call it a windfall?).

It can quite clearly be seen that the financial insecurity sparked by the Credit Crunch crisis has created a generation of Carlisle homeowners/landlords who are savers and improvers rather than movers and excessive borrowers, using excess cash to invest in their property and pay down debt or to excessively borrow on their equity growth, as can be seen on the graphs and table.

As the percentage of mortgages (the loan to value) has decreased since 2014 from 14.01% to 12.61% in Carlisle, this is good news for every Carlisle homeowner and Carlisle landlord because, irrespective of whether the ‘Boris Bounce’ is short or long lived, it shows the Carlisle property market is in a better state than ever before to ride out any storm that it might encounter because less people will be in negative equity or have prohibitively high mortgages.

Carlisle Landlord’s £7.6m Tax Bill

With the budget almost upon us, I am asking John Stevenson the Conservative MP for Carlisle to remind the Chancellor Rishi Sunak and Prime Minster Boris Johnson to use their persuasive skills to highlight and take a more holistic approach and attitude to the private rented sector and tackle issues which affect a Carlisle landlords’ capability and capacity to strategically run an effective buy-to-let business. I asked Mr Stevenson for comment but as of yet he hasn’t replied.

For the last thirty years, the Government have passed responsibility of housing the masses from local authorities (i.e. council housing) to the estimated 1.5 million British buy-to-let landlords.

However, since 2015/16, Carlisle landlords have faced increasing tax burdens as each year goes by, with the removal of mortgage interest rate relief on income tax (Section 24), the introduction of the 3 percent surcharge on stamp duty, and the reduction of the letting relief on capital gains tax. 

My research has calculated the total income tax contribution by 2,000 Carlisle private landlords in the tax year 2015/16 was £5,218,996

However, the eradication of higher rate mortgage interest relief (also known as Section 24) announced in 2015 by George Osborne has been estimated to add a further £1.9 billion nationally to landlord’s tax liability. Whilst raising money from landlords is an easy target, and the tax receipts attractive, it does make the landlords financial burden even heavier.

And by 2021/2, when the full extent of the Section 24 relief kicks in, that income tax liability will rise to £7,619,734

for those Carlisle landlords

This doesn’t even take into account additional liabilities such as Capital Gains Tax, the 3% additional duty on top of the prevailing Stamp Duty Land Tax and VAT.

Ambiguity and a lack of certainty is the foe of all investment, which has been seen with Brexit. Now, just as things are starting to get rosy in Q1 with the pent-up demand released with the ‘Boris Bounce’, the last thing we need as a ‘collective’ property industry is for the Government to see us landlords as a constant cash cow. This new Tory government must acknowledge the value the majority of private landlords offer by housing in excess of 9.45 million people in the country.

Westminster needs to take a balanced approach to the significant issues of possession (especially with the impeding removal of section 21 evictions), taxation and all rental properties needing to be at least an ‘E’ energy efficiency rating, to connect the value the private rented sector offers the country by effectively housing over a fifth of the population and avoid unintentional consequences by making renting a private rented property harder for tenants … because, it’s not financially viable to buy (or retain) a buy-to-let property with the way things are going against the landlord.