The Times - UK (2020-09-05)

the times | Saturday September 5 2020 1GM 61

Money

by Money Magpie, a personal finance

website, found that only five of 24

students had been offered a more flexi-

ble contract while the rest had had to

sign on for the same fixed period as

before — usually a full academic year.

A larger survey of 1,255 students and

their parents or guardians, also for

Money Magpie, found that only 22 per

cent of students had received a partial

refund by landlords for the costs of

accommodation that they had aban-

doned hastily after the March lock-

down, when universities were closed.

Many university halls of residence

and purpose-built accommodation

blocks are being more flexible than

landlords. The University of Leicester is

offering weekly, termly or annual

accommodation contracts, while the

4am yesterday, along with Gibraltar,

French Polynesia and some Greek is-

lands. Scotland, which already had

quarantine measures for Greece, added

Portugal and French Polynesia.

Those travellers who bought insur-

ance policies after March 11, when Cov-

id-19 was declared a pandemic by the

World Health Organisation, cannot

claim money back when quarantine

measures change because the pan-

demic is what insurers refer to as a

“known event” for which they have

built exemptions into their policies.

Rory Boland from the consumer

Amir Goshtai from Experian, a credit

report agency, said that lenders have

an increased appetite for risk. Andrew

Hagger from Money Comms, a finance

advice website, warned that the devil is

in the detail, however, because much

depends on the sort of deals people are

being offered. Credit limits could be

lower and interest rates could be higher

than those offered before lockdown.

“Hundreds of thousands are taking

payment holidays, which shows that

plenty of people are operating close to

the wire,” he said. “I still expect banks to

be quite nervous about lending.”

The Office for National Statistics

says that the UK is in a recession, with

GDP falling 20.4 per cent in the second

quarter of this year.

Hagger added: “I’m sure that lenders

are still looking to lend and make a

profit, but underwriting criteria will be

tighter than it was six months ago.”

Goshtai said people looking for

credit should use comparison services

until they find the right product for

their needs.

Katherine Denham

University of Greenwich is offer-

ing break clauses “if university

becomes a completely virtual

campus”. Rooms in the halls will

be held for students should they

decide to return afterwards.

Half of the 22 leading

private sector student

accommodation com-

panies — Ardmuir,

Aparto, Collegiate,

CRM Students,

Student Castle, Fu-

sion, Host, Derwent,

Prime Student Living,

Gather and Mezzino

— are offering coro-

navirus break claus-

es in contracts, while

all companies are

faced during the

first lockdown when

many investors offered tenants rent

holidays and then had to request mort-

gage breaks from their banks to cover

the shortfall in income.

Buy-to-let landlords are expected to

collectively lose £5.7 billion by 2024

because of the combined impact of

giving tenants payment holidays and

reducing rent as we go into recession,

according to Home Made, a property

tech company. This would be four times

worse than the £1.3 bilion loss that land-

lords were said to have experienced

during the 2008 recession.

A small survey of students preparing

to go back to university this term found

that most of their landlords were not

providing break clauses. The analysis

The University of Greenwich is offering break clauses in rental contracts

and refunds to students who go home because of Covid-19. Right, Tom Birtles

L

andlords are refusing to give

students break clauses on

their university tenancies

despite the likelihood of terms

being cut short or interrupted

by local Covid-19 lockdowns.

The National Residential Landlords

Association (NRLA), an industry body

representing 84,000 landlords across

the country, has told them not to

build flexibility into students’ rental

contracts for the new academic year.

The body argues that students would

be required to stay where they are in

the event of future local lockdowns,

rather than return to their

parents, as most did during the

lockdowns in England, Scot-

land and Wales in the spring.

The decision has angered

student representative groups,

which have demanded that

landlords offer the early release

clauses. They say students would

want to go home to their parents

during lockdowns and leave often

cramped and unhygienic shared ac-

commodation. They say the landlords’

policy contrasts with official university

accommodation companies, who are

overwhelmingly offering break clauses.

John Stewart from the NRLA, said:

“We do not recommend that landlords

include blanket early release clauses.

“Break clauses are typically difficult

to enforce, prone to misinterpretation

and often provide less flexibility than

simply providing a shorter contract

that either party can serve notice to

end easily.”

He said that landlords and tenants

should keep “in regular contact” and

build bespoke solutions depending on

the circumstances.

NRLA’s hardline guidance reflects a

desire by amateur landlords to avoid

incurring the same kind of losses they

Landlords lectured over lockdown

offering flexibility on term start dates.

Tom Birtles, 19, a maths and physics

student at the University of Exeter, was

given a refund of £1,500 after leaving his

university halls of residence on March

20 to return home to his parents’ house

near Eastbourne.

He will be living in a group of six in

private rented accommodation this

academic year, but was not offered a

break clause in his rental contract by

his landlord — even though he and all

of his flatmates have decided that they

would return home in the event of a

lockdown.

“I’ve asked again, but it’s unlikely

anything will come of it,” he said.

“If there was a second wave of the

virus I would definitely go home again.

Accommodation is generally cramped

in Exeter — it wouldn’t be a great

place to lock down. I’ll have to take the

financial risk.”

The National Union of Students has

called for landlords to show more flexi-

bility. Its coronavirus student survey

found that one in ten students had

secured money back from their land-

lord during the spring lockdown.

“Thousands were stuck paying rent

for accommodation they no longer

could or should occupy and many have

fallen into arrears,” said Hillary Gyebi-

Ababio, the student body’s vice-presi-

dent for higher education.

Simon Thompson, the manag-

ing director of accommoda-

tionforstudents.com, the rent-

al portal, said that landlords

were clamping down after

being taken by surprise by the

first lockdown.

“For many landlords this

housing is a secondary form of in-

come. They have got to cover

their costs,” he said.

According to the

English Private Land-

lord Survey, about 45

per cent of landlords

own only one invest-

ment property, while

only 17 per cent own

five or more. Some 61

per cent of all land-

lords say they have

gross rental income

of less than £20,000

a year.

Students worried about

a second wave of the

virus say they should

get rent refunds if they

have to leave university,

says David Byers

ALAMY

78%

of students didn’t

get a refund on last

year’s rent because

of the pandemic

The cost of a quarantine that never was

T

ravellers who paid hundreds of

pounds to rush back from Portu-

gal to avoid a two-week quaran-

tine that, in the event, was not deemed

necessary in England will not be able to

claim it back through their insurance.

On Monday the government looked

certain to declare a two-week lock-

down for travellers returning from Por-

tugal after the country recorded 23

cases per 100,000 within seven days.

This triggered a rush by thousands of

the 75,000 British holidaymakers in the

country to book early flights before any

restrictions kicked in, often paying

vastly inflated prices. Easyjet flights at

the end of the week sold out and ticket

costs soared with BA and Ryanair.

On Thursday, however, the transport

secretary, Grant Shapps, said that no

quarantine was being introduced in En-

gland, despite the rate of cases breach-

ing the government’s limit. “We con-

tinue to keep the Travel Corridor list

under constant review & won’t hesitate

to remove countries if needed,” he

tweeted.

To add to the chaos, the government

of Wales said that arrivals from main-

land Portugal would be subjected to

two weeks’ quarantine, starting from

group Which? said: “We told the De-

partment for Transport that the specu-

lation would get worse and worse un-

less it explained how it makes decisions

about quarantines. At the moment, no-

body has a clue, and that is causing pan-

ic. Worse than that, in this instance it

has cost people many thousands of

pounds because it has delivered mis-

leading messages about quarantine

before appearing to row back on them,

which led people to change their plans.

“To be frank, I can’t imagine a lot of

people will travel again while this gov-

ernment stays in power. From the point

of view of tour operators, this season

has been an absolute disaster. They will

have put people out of business, the way

they have handled this — it’s idiotic.”

Two weeks ago Portugal was re-

moved from the list of restricted coun-

tries and placed in a “travel corridor” al-

lowing passengers to visit without

having to self-isolate.

Writing in The Times this week, Will-

ie Walsh, the chief executive of Inter-

national Airlines Group, the owner of

British Airways, claimed that the “ever-

shifting list” meant that “the UK has

officially hung up the ‘closed’ sign”.

David Byers

Many Britons rushed back from the

Algarve to avoid expected isolation

Borrowers’ boon as credit

market shows signs of life

A

nyone seeking a credit card

could be in luck after banks

turned the lending taps back on.

Economic uncertainty led banks to

tighten their lending criteria, but there

are signs that some are putting prod-

ucts back on the table. In July only one

in four borrowers could get a pre-

approved credit card after entering

their details online. Even someone with

a good credit score may have struggled.

In August one in two borrowers was

pre-approved for a credit card. Among

people with a good credit score, the pro-

portion went up to almost two thirds.

When you apply for credit, banks can

conduct a hard search on your credit

history, which can damage your ability

to borrow in the future. Being able to

check your chances of approval before

submitting an application limits the

number of hard searches on your file.

An extra £1.2 billion was borrowed by

consumers in July, according to the

Bank of England.

This came after record levels of re-

payments between March and June as

spending dropped during lockdown.