Landlords are “scapegoated” for the Covid rent crisis
The government has turned its back on the private rental sector, with landlords forced into a no-win situation: obtaining zero rental income from tenants or being forced to carry out evictions.
The National Residential Landlords Association (NRLA) has warned that without financial support to tackle Covid-related rent arrears, landlords are forced to end up in a corner.
The group warns that the goodwill of landlords in the face of rising rent debts cannot continue without government support.
An NRLA report found that more than 800,000 people living in the private rental sector in England and Wales have fallen and have remained in arrears on rent since the foreclosure began. Of this group, the vast majority (82%) had no arrears before the start of the pandemic.
The NRLA said the majority (60%) of landlords believe their rental business will be negatively affected as a result of the pandemic, with 34% saying their rental income has been affected by the events of the last year.
The NRLA calls on the government to introduce new measures to bring housing assistance back in line with market rents. Government data shows that across the UK, as of February 2021, 55% of private renter households receiving universal credit that included housing assistance had a gap between that and the rents they paid. The average shortfall was £ 100 per month.
However, the Chancellor froze local cash housing allowance rates from April of this year, a move the Fiscal Studies Institute called “arbitrary and unfair”.
The NRLA calls for the local housing allowance to be returned, at a minimum, to cover the lowest 30% of market rents in a given area, and preferably increased to cover average rents.
For tenants in arrears but not eligible for benefit assistance, the NRLA calls for an operating hardship loan program to help tenants pay rent arrears accumulated since foreclosure measures began in March latest. He says these loans should be government guaranteed, interest free and repayable as renters’ incomes recover from the pandemic. A similar system is already in place in Scotland.
Ben Beadle, chief executive of the NRLA, said: “The Chancellor has clearly decided on a strategy of making landlords the scapegoats of a crisis on his own initiative. For less than the cost of the “Eat Out to Help Out” program, it could provide landlords and tenants with the financial support they need to keep tenants in their homes and avoid damaging credit scores.
“Landlords want to maintain rentals as much as possible, but without the support so many people desperately need, the Chancellor will have to accept the tragic costs of his inability to act.”