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Rental arrears ‘crunch time’

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A short term ban on repossessions has resulted in an increase in the number of private rented sector tenants who are in long term danger of losing their homes.

This is the finding of research conducted by the National Residential Landlords Association, which says it is now ‘crunch time’ for remedial action.

The research estimates that 840,000 private tenants have built rent arrears since lockdown measures began. With no action possible against them, these debts are increasing to the point where there is no hope of many being able to afford to pay them back, said NRLA.

‘The outcome will be that most will have to leave their homes as emergency measures taper down from June. On top of this, the damage such debts could have on credit scores will cause tenants difficulties when wanting to move home’.

Although most landlords have been working with struggling tenants to help keep them in their homes, 60 per cent have lost rental income as a result of the pandemic, said NRLA. Of these, 39 per cent said the losses were continuing to increase.

And the situation for landlords is being made worse by the strains that the courts are now under in hearing the relatively few cases that are being allowed to go ahead.

It is now taking an average of one year from repossession claim to enforcement. And this is despite only the most serious cases currently being considered by the courts.

The NRLA is calling on the courts to make much better use of technology to ensure that legitimate possession cases can be heard more swiftly.

‘Whilst many landlords and tenants have worked well in responding to the challenges posed by the pandemic, we are now at a crunch point’, said NRLA chief executive Ben Beadle.

‘As the country follows the roadmap out of lockdown, so too emergency measures in the rental market will need to be eased.

‘Ministers need to ensure that tenants have the financial means to pay off rent debts built as a result of the pandemic. Without this they will have to accept the inevitable consequence of rising homelessness and damaged credit scores’.