Renters and Landlords face cliff edge as furlough ends
Failure to address COVID rent debts shows Government has given up on those struggling through no fault of their own.
PRIVATE renters and landlords across the country face a cliff edge as the end of furlough coincides with cuts to benefit support.
With the Bank of England warnings indicating that renters are more likely than any other group to have lost their jobs or been furloughed, the National Residential Landlords Association argues that many more renters face the prospect of mounting rent debts.
A new report published by the NRLA today shows that, by the Government’s own admission, the proportion of private renters in arrears tripled in the period from 2019/20 to the end of 2020 from three to nine percent.
With furlough due to draw to a close at the end of September, alongside a £20 a week cut to Universal Credit and a continued freeze to housing benefit support, many more tenants are likely to accrue unsustainable debts.
The NRLA points to warnings from the Bank of England about the risks posed to the country’s economic recovery as a result of renters experiencing financial difficulties. It also highlights concerns about what impact a failure to tackle COVID related rents debts will have on the credit scores of affected tenants, as well as the likelihood that they will be able to stay in their homes.
With the Government having now admitted that many landlords “are highly vulnerable to rent arrears”, the NRLA argues landlords cannot be expected simply to deal with non-payment of arrears.
The NRLA is calling on the Chancellor to develop an interest free, government guaranteed hardship loan to support the majority of tenants with COVID related rent debts who are not eligible for benefit support. This scheme would help these tenants to pay off their rent debts and would follow the introduction of similar schemes in Scotland and Wales. More broadly, it is calling on the Government to scrap plans cut Universal Credit payments to avoid potentially devastating consequences for tenants across the country.
Ben Beadle, Chief Executive of the National Residential Landlords Association said:
“Many tenants and landlords have struggled to cope during the pandemic leaving them exposed to the impact of rent debts which they are unlikely to ever pay off.
“By ending furlough and cutting benefits in quick succession, and without the introduction of a targeted package to tackle COVID related rent debt, the Government is worsening an already critical situation. Without transitional support, and as the country gets back to normal, the Chancellor will be turning his back on those renters and landlords in desperate need of help.”
More information
You can read NRLA's report on this here.
