0:01 AM, 17th June 2021, About 3 years ago 9
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The NRLA is accusing the Chancellor of making landlords the scapegoats for the Covid-19 rent debt crisis as he turns his back on the support the sector needs.
A new report published by the National Residential Landlords Association outlines the toll that COVID-19 has taken on the private rented sector. It warns that without financial support to tackle COVID-related rent arrears, the Chancellor is forcing landlords into a corner. They either have to accept continuing to receive no income or resort to repossessing their property with all the consequences this course of action entails for tenants.
The NRLA is warning that the goodwill of landlords in the face of mounting rent debts cannot continue without support from the Treasury.
The report highlights the scale of the crisis, as over 800,000 people living in the private rented sector in England and Wales have rent arrears built since lockdown measures began which are still to be paid off. Of this group, the vast majority, 82 per cent, were not in arrears prior to the start of the pandemic.
Moreover, the majority of landlords (60%) feel their lettings business will be negatively affected as a result of the pandemic, with 34% saying their rental income has been impacted by the events of the past year. Despite more than 9 in 10 landlords being individuals, and almost half renting out just one or two properties, among those who had offered at least one tenant a rent-free period or allowed rent to be deferred, 58% had absorbed the losses from their savings.
To help resolve this crisis, the government should introduce new measures to bring housing benefit support back into line with market rents. Government data shows that across the UK, in February 2021, 55 per cent of private rented households in receipt of Universal Credit which included housing cost support had a gap between that and the rents they paid. The average shortfall was £100 a month. Despite this, the Chancellor froze local housing allowance rates in cash terms from April this year, a decision the Institute for Fiscal Studies branded “arbitrary and unfair.”
The NRLA is calling for the Local Housing Allowance to return, at the very least, to covering the bottom 30% of market rents in any given area, and preferably increased so that it covers average rents.
For the majority of tenants now in arrears but ineligible for benefit support, the NRLA is calling for a hardship loan scheme to help tenants pay off rent arrears built since lockdown measures started last March. These should be government guaranteed, interest-free and repayable as the tenants’ incomes recover following the pandemic. The measure has the support of organisations such as the debt charities, StepChange and the Money Advice Trust, and Shelter.
Not only would it prevent tenants losing their home, but it would also stave off the difficulties that would be caused as a result of damaged credit scores. Of those tenants with COVID-related rent arrears, 26% said that their landlord had attempted to reclaim these through a court order. Such steps serve to damage a tenant’s credit score making it difficult for them to access new housing in the future.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“The Chancellor has clearly decided on a strategy of making landlords the scapegoats for a crisis of his own making. For less than the cost of the ‘Eat Out to Help Out Scheme’ he could provide landlords and tenants with the financial support they need to keep tenants in their homes and prevent damage to credit scores.
“Landlords want to sustain tenancies wherever possible, but without the support so many desperately need, the Chancellor will need to accept the tragic costs of his failure to act.”
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Alistair Cooper
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Sign Up9:35 AM, 17th June 2021, About 3 years ago
I fully support the concept of a ‘Bounce Back Loan’ scheme for tenants in arrears.
The Courts are clearly both overwhelmed and disinterested in coping with the huge backlog of possession cases already pending and effectively encouraging a further tidal wave of cases in the face of a lack of any alternatives will only worsen the current situation. Shorter notice periods (still double pre Covid notice periods) are irrelevant if it still takes a year plus to get to a hearing!
We would all like to see higher housing benefit levels but we have already seen a significant rebasing so it is unrealistic to expect further rises. The issue that has never gone away is the blatant refusal of the DWP to engage with landlords and pay the Housing Element direct. The amount of benefit is of little consequence if the tenant is keeping it all!
This could be solved overnight with a simple policy shift and at no cost to the Treasury!
rbinscotland
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Sign Up9:51 AM, 17th June 2021, About 3 years ago
I wouldn't say wholeheartedly that I'd be happy, but content that a BBL equivalent is available to tenants to repay the shortfalls in rent. But as long as it is managed properly where it shoukd end. Not another new TV or Mobile phone for the tenants. ( not all are like this) however, with uc being paid to tenants doesn't help the landlords if they don't see it.
A landlord should go direct to the HMG dwp maybe and tell them what the outstanding rent is with an affidavit from the tenant agreeing to the figure. At that point the tenant should continue to only pay actual rent not try to catch up, messing up the agreed figures.
Once agreed. Then HMG can send the landlord the money direct, clearly stating who it is for and also send an invoice/ receipt to both parties. The reason for this I would say is to allow the landlord to include the said figure in their self assessment figures. These can then be verified by HMRC at time of completion of the SA.
I'm sure there are some elements that this will not work. But trying to get the simple service and service paid for, effectively double entry bookkeeping it's then up to the government to NOT make mistakes in their systems.
Which I feel is why tenants got onto debt and landlords out of pocket.
Chris @ Possession Friend
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Sign Up10:18 AM, 17th June 2021, About 3 years ago
What the NRLA are asking for is Nowhere near enough – too little, too late
Of course landlords have been made scapegoats and they knew that at the very start of the pandemic ( and even much before )
The loan scheme in Wales is ‘ Optional ‘ so tenants are choosing. ” shall they burden themselves with years of debt, or just ignore unpaid rent, ” – Safe in knowledge that Government have prevented landlords from doing anything about it. !
rbinscotland
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Sign Up11:00 AM, 17th June 2021, About 3 years ago
Reply to the comment left by Chris @ Possession Friend at 17/06/2021 - 10:18
You've hit the nail on the head. If the tenants decides to receive money from UC or under a BBL for tenants to repay outstanding rent then the tenant in some cases will decide to spend it elsewhere. This is where the problem, the gap needs filling.
The landlord should ask the HMG for the money and they need to work with the landlord and tenant giving them a set date to reply or (lets say for legitimate non replies ) a proportion of the OS rent - lets say 60% that way the landord gets something back and it allows the tenant to reply later. But the UC cant deal with normal regular payments. so its probably not going to happen.
Barry Clark
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Sign Up18:11 PM, 17th June 2021, About 3 years ago
The situation would never have arisen if idiot politicians had never put housing benefits in the hands of the tenants in the first place, same as putting non eviction notices in place due to covid, its just encouraged many not to carry on paying rents as they cant be evicted.
Governments caused this, they should pay for it.
Gunga Din
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Sign Up12:47 PM, 18th June 2021, About 3 years ago
"A landlord should go direct to the HMG dwp..."
How would one do this?
My UC payment problem is small in comparison to many so I won't bore you with it (about £500 debt) but I'd still like to complain.
rbinscotland
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Sign Up14:54 PM, 18th June 2021, About 3 years ago
Reply to the comment left by Gunga Din at 18/06/2021 - 12:47
I had about £3k underpayments from tenants and believe it or not about £8k payments that kept coming but nothing to do with me. It was a UC mistake (s) I went through my local MP who is taking it up with Coffee MP head of dwp.
But there are 2 names - which admittedly keeps changing on the gov.uk pages
rbinscotland
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Sign Up14:56 PM, 18th June 2021, About 3 years ago
Reply to the comment left by Gunga Din at 18/06/2021 - 12:47
Universal Credit helpline
Telephone: 0800 328 5644
Textphone: 0800 328 1344
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 328 5644
Welsh language: 0800 328 1744
Monday to Friday, 8am to 6pm
British Sign Language (BSL) video relay service
Watch a video to check if you can use the service.
Go to the Universal Credit video relay service.
Monday to Friday, 9am to 5pm
Ian Narbeth
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Sign Up10:33 AM, 22nd June 2021, About 3 years ago
The Chancellor could just print money like they do in the USA https://www.nytimes.com/2021/06/21/us/california-rent-forgiveness.html