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Landlords in England are being forced into a corner because tenants are not being given the financial support they need, said the National Residential Landlords’ Association this week.
Many landlords now have to make a choice between accepting no income or resorting to repossessing their property, it claimed.
A high proportion of private landlords have allowed rent free periods during the coronavirus crisis, or allowed rents to be deferred. Six in ten of these have absorbed the lost income by using personal savings. But ‘the goodwill of landlords in the face of mounting rent debts cannot continue without support from the Treasury’, warned NRLA.
Its latest survey estimated that over 800,000 people living in the private rented sector in England and Wales now have rent arrears that have been built up during since the coronavirus lockdown. Of this group, eight in ten were not in arrears prior to the start of the pandemic.
‘To help resolve this crisis, the Government should introduce new measures to bring housing benefit support back into line with market rents’, said NRLA. ‘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 a level that will cover the bottom 30 per cent of market rents in any given area, but preferably for it to be increased to a level that covers average rents. It also wants a Government guaranteed, interest free, hardship loan scheme to help tenants pay off rent arrears built since the lockdown began.
‘The Chancellor has clearly decided on a strategy of making landlords the scapegoats for a crisis of his own making’, claimed NRLA chief executive Ben Beadle. ‘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 tenants desperately need, the Chancellor will need to accept the tragic costs of his failure to act’.