Potential ‘cliff edge’ for Poole renters and landlords as furlough winds up...
Private tenants and landlords across the country face a cliff edge as the end of furlough coincides with cuts to benefit support, according to a leading trade body.
In a report out today by LettingAgentToday The National Residential Landlords Association (NRLA) has said that the failure to address Covid rent debts shows the government has given up on those struggling through no fault of their rent. Following Bank of England warnings suggesting that renters are more likely than any other group to have lost their jobs or been furloughed, the NRLA has claimed that many more renters face the prospect of mounting rent debts.
A new report published by the body today highlights that, by the government’s own admission, the proportion of private tenants in arrears tripled in the period from 2019/20 to the end of 2020 from 3% to 9%.
As furlough draws to a close at the end of September, combined with the highly contentious £20 a week cut to Universal Credit and a continued freeze to housing benefit support, the NRLA believes many more tenants are likely to accrue unsustainable debts.
The NRLA also points to warnings from the Bank of England about the risks posed to the country’s economic recovery because of renters experiencing financial difficulties. What’s more, the organisation highlights concerns about what impact a failure to tackle Covid-related rents debts will have on the credit scores of affected tenants, in addition to the likelihood that they will be able to stay in their homes.
Now that the government itself has admitted that many landlords ‘are highly vulnerable to rent arrears’, the NRLA has said landlords cannot be expected simply to deal with non-payment of arrears.
As such, the body is calling on the Chancellor Rishi Sunak to create 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, the NRLA claims, would help these tenants to pay off their rent debts and would follow the introduction of similar schemes in Scotland and Wales.
More broadly, the NRLA is calling on the government to scrap plans to cut Universal Credit payments to avoid ‘potentially devastating consequences’ for tenants across the country, echoing a call made last week by charity StepChange to reverse the planned cuts to swerve a major Covid debt crisis in the rental sector.
“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,” Ben Beadle, chief executive of the NRLA, commented.
“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.”
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