As the economic impact of the ongoing pandemic, COVID-19 continues to wreak havoc on global financial markets, local landlords are being asked to show compassion – and leniency – to tenants who will struggle with maintaining rental payments as many industries are shut down.
Losing regular employment and income is an impending reality a growing number of Australians face and leading financial and tenancy experts are calling for tenants and home-owners to be protected.
Tenants Victoria is one of around 40 community organisations that are demanding a temporary suspension of repayments on loans and debt collection.
The collective of industry specialists also want to see penalty and late fees connected to the supply of essential services – gas, water and electricity – waived during these tough times.
Although the big banks are already offering support to customers under their existing financial hardship criteria on an individual basis, a call for an over-arching decision that is easily understood and accessible is growing louder as each new day brings news of further Coronavirus-related issues.
Existing support to defer mortgage repayments, suspend interest and also waive charges and fees will all offer some relief and should be explored by anyone foreseeing the threat of financial losses in their own lives.
To help protect the community’s more marginalised members, the Australian peak body for homelessness – Homelessness Australia – has urged the Federal Government to offer immediate emergency payments to ensure rent for casual and contract workers whose income will be compromised – or completely lost – can still be paid. With media rents in Melbourne hovering around $430 per week, access to Newstart Allowance or Sickness Benefits will not be enough, said Homelessness Australia chair, Jenny Smith, for many to be protected, without additional financial assistance. She called for the government to offer a payment to cover one month’s worth of rent initially, with a view to extending the assistance if the crisis continues.
Urgent Relief from Financial Stress Needed
According to the last Census, more than 10 per cent of all Australian tenants reported being under rental stress. In the world of home-owners with mortgages, that financial stress was reported by around seven per cent of Australians. And because as many as 40 per cent of Australians have less than $500 of savings in their bank accounts, according to Canstar’s Consumer Pulse Report 2019, there is very little leeway.
Renters in share houses and boarding houses without rental agreements face the most uncertainty and to avoid evictions, banks offering mortgage relief will have a flow-on effect that helps both home-owners and tenants.
It’s an evolving situation that needs scrutiny – and some empathy – and we hope that people look after their mental health and physical health, first and foremost to say as positive and resilient as possible in this unprecedented circumstance.
For more information about your mortgage, contact our home loan experts at Lending Specialists today.