Landlords being ‘made scapegoats’ for Covid rent crisis
The National Residential Landlords Association (NRLA) has warned that without financial support to tackle Covid-related rent arrears, landlords are being forced into a corner.
The group is warning that the goodwill of landlords in the face of mounting rent debts cannot continue without support from the government.
A NRLA report found that more than 800,000 people living in the private rented sector in England and Wales have fallen into, and remained in, rent arrears since lockdown began. Of this group, the vast majority (82%) were not in arrears before the start of the pandemic.
The NRLA said the majority (60%) of landlords 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.
The NRLA is calling for the government to 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% 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.
However, 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 tenants 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. It says these loans should be government guaranteed, interest-free and repayable as the tenants’ incomes recover following the pandemic. A similar scheme is already in place in Scotland.
Ben Beadle, NRLA chief executive, 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.”