The UK Government announced its ‘Homes for Ukraine’ scheme last week. More than 150,000 people have already registered as potential ‘sponsors’. If you’re considering making an amazing contribution to this initiative, what information might you need to check before hosting an Ukrainian refugee?
Should landlords offering accommodation to refugees tell their mortgage lender and insurer?
Aiding the refugee crisis that is engulfing the war stricken European country by offering your property would be a fantastic act of human kindness. The National Residential Landlords Association has urged “all private landlords” to look at what accommodation they have to offer anyone resettling in the UK. Anyone considering offering their rooms, homes or properties should not be put off. Though it’s best to anticipate and make plans for any potential issues that might arise at a later date
This blog aims to help you double-check any details that might be playing a part in your decision making process. Experts have highlighted some legal and financial checks that they should carry out to make sure the process goes smoothly. For example, it is worth seeing whether interested parties such as insurance and mortgage firms have stipulations that could impact on you as a homeowner if you welcome another family into your home. Though many firms have waived some of their usual requirements in order to support customers that want to offer assistance to Ukrainians.
The scheme will see UK residents matched with Ukrainian refugees to offer them a place to stay. Having secured a residence in the UK will help them to gain entry to the country. Those wanting to help can register their interest on the Gov.uk website. They will then be contacted by the Department for Levelling Up, Housing and Communities. If their accommodation is deemed suitable for the scheme they will be asked to apply.
Homes must be offered for a minimum of six months. Those offering the accommodation must be legally entitled to remain in the UK for at least that period of time. No official requirements have been stated regarding the size of home or facilities required. However the DLUHC has said it will carry out ‘checks’ on both the sponsors and their homes ahead of any refugees being placed.
If they pass the checks, sponsors will get £350 per month for hosting a family.
Do I need to check with my home insurer?
We would advise that, if you are planning on sharing accommodation with a Ukranian refugee at your home, then it is worth telling your home insurer. All good home insurance providers should be happy with the plan.
We would not expect insurers to require additional premiums in these circumstances as the refugees will be treated as guests. However, the insurers will expect to be made aware of the arrangement so they can update their records.
If you do not update them with details of the arrangement it could affect your right to claim at a later date. If the circumstances continue longer than a year, some firms may also consider it a permanent arrangement.
Will housing a refugee affect my landlords insurance?
Landlord insurers may have more stringent requirements than standard home insurance providers. This will be particularly true if a Ukrainian family is expected to be the sole resident of a property.
Landlords should definitely contact their insurer to let them know of their intention. Most will only want to note the arrangement on the policy from an underwriting perspective. However here are some additional considerations:
- Offering an annex or separate property can inadvertently create a tenancy. Both parties should understand the way they can extend or terminate the agreement at the outset to avoid risking acrimony or legal action further down the line.
- If landlords do want to sign a tenancy agreement to set out each party’s responsibilities, the National Residential Landlords Association (NRLA) has said it will provide tenancy agreement wording for them to use.
- Questions around responsibility for property maintenance, insurance and payment for utilities and council tax that need to be considered before, rather than after, the event.
- Legal experts have advised potential landlords to make themselves aware of local council rules surrounding Homes in Multiple Occupation (HMOs). If several families were allowed to stay in a single property, it may give rise to the need to register as a House in Multiple Occupation (HMO) under the Housing Act 2004. You would expect local authorities to be understanding but unless the Government scheme allows for a specific exemption, then licensing should be investigated with the local council and their views obtained.
Do volunteers need to inform their mortgage lender?
Another factor to consider for homeowners with mortgages is whether their lender has any rules around who can live in the property. It is expected that many lenders will make special exceptions for those who offer to help refugees under the Homes for Ukraine scheme. Though experts have said that it is worth homeowners investigating their lenders’ policy and notifying them of their plans.
This has been highlighted as being of particular importance to landlords or those offering whole properties. Lodgers, typically up to two people, that would normally occupy a room within the home and access shared communal areas with no locks on doors being required are generally accepted.
However, if a homeowner is intending to provide a whole property or annex this may be considered to be a letting and is a different situation as a formal tenancy agreement may be put in place. The guidance is that in most circumstances there will be no impact on your mortgage. Though your lender may be concerned about the possibility of the “lodger” or “tenant” acquiring legal rights.
Therefore the best advice is to contact your lender regardless of the situation to notify them of your intentions and double-check that they have no issues.
We hope this information has been of use. Everyone at Plan applauds those that are willing to support the scheme.