New Scottish Landlord Covid-19 Loan Scheme

The Scottish Association of Landlords (SAL) has welcomed a new £5 million fund set up by the Scottish government offering interest-free loans to landlords whose tenants are having difficulty paying rent during the coronavirus crisis.

The Private Rent Sector Landlord COVID-19 Loan Scheme will offer landlords up to 100% of lost rental income for a single property. It is designed to support PRS landlords who are not classified as businesses, have five or less properties to rent and have lost rental income due to tenants unable to pay rent as a result of the emergency lockdown measures.

Housing Minister Kevin Stewart said: “We want to ensure no one loses their home during this unprecedented public health pandemic which is why we passed legislation to protect tenants against any eviction action for six months.

“This new £5 million loan fund builds on that action and offers landlords the same security as tenants, ensuring they have financial support if tenants struggle to pay rent because of coronavirus.

“While all tenants should pay their rent if they can, we recognise the financial pressure people are facing. The Scottish Government encourages landlords to talk to their tenants about rent payment issues. We also expect landlords to be as flexible as possible with their tenants, discuss managing rental payments and help them find sources of financial support and advice.”

Chief Executive of the Scottish Association of Landlords (SAL) John Blackwood said: “We are pleased the Scottish Government has taken this first step in helping the private-rented sector weather the effects of the COVID-19 pandemic, which recognises the role private landlords play in the housing system.

“Collectively the housing sector needs an approach that protects all parts of housing in Scotland to guarantee we can provide the different types of quality housing we need.  We want to continue to work with the government, as well as other public bodies, trade bodies and charities to ensure to achieve that and hope there will be further steps taken soon.”

SAL continues to make the following points to the Scottish Government:

“1. The loan scheme is welcome but needs to go further.

2. Landlords are being unfairly penalised at a time when other small businesses and self-employed people have been supported with grants to save their businesses.

3. Landlords of any portfolio size should have access to the scheme.

4. Loans should be available for more than one property where rent has been lost due to COVID-19.

5. There is little recognition for the fact that landlords are taxpayers and provide much needed homes for people to live in, in some cases for the most vulnerable in society.”

Additional government information on the scheme:

The Private Rent Sector Landlord (non-business) COVID-19 Loan Scheme opened for applications on 5 May. Read more information.

The Coronavirus (Scotland) Act 2020 already protects tenants from any eviction action for six months.

Landlords facing difficulties with repayments on a mortgage for a rental property are expected to seek a mortgage repayment holiday from their lender before they apply for a loan.

The application process requires landlords to confirm they understand the terms of the Coronavirus Act 2020 in relation to eviction proceedings, and that they have discussed rent issues with their tenant and reached agreement on managing arrears.