Targeted financial package to help renters pay off arrears required

Targeted financial package to help renters pay off arrears required

9:49 AM, 18th February 2021, About 3 years ago 2

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Joint statement by The Big Issue Ride Out Recession Alliance, Crisis, Citizens Advice, Joseph Rowntree Foundation, Money Advice Trust, The Mortgage Works, National Residential Landlords Association, Nationwide Building Society, Propertymark, StepChange Debt Charity and Shelter:

At least half a million private renters are in arrears due to the economic impact of Covid-19. The UK Government’s own research shows that ‘private renters report being the hardest hit by the pandemic’.

Renters and landlords whose finances have been affected since lockdown cannot keep tenancies going without additional financial support.

We welcome many of the measures taken to date, which have helped to sustain tenancies in the short term. But they do not go far enough to adequately protect renters going forward.

The longer the Chancellor waits to take action, the more rent debts will increase, and the greater the risk of homelessness will become. Without additional support, more renters will lose their homes in the coming months, with the risk of an increase in homelessness.

As organisations with the aim of sustaining tenancies wherever possible we consider that this requires two things in the forthcoming Budget.

First, a targeted financial package to help renters pay off arrears built since lockdown measures started in March last year. This will help to sustain existing tenancies and keep renters in their homes – whilst also ensuring rental debt does not risk them finding homes in the future.

Secondly, we need a welfare system that provides renters with the security of knowing that they can afford their homes. The pandemic has shown how vital this is to providing security at a time of crisis. The Government increased Universal Credit and Housing Benefit because it recognised that the system was not doing enough to support people in the first place, yet it has chosen to freeze Housing Benefit rates again from April and is considering cutting Universal Credit at the same time. It cannot be right that these measures could be pulled away from renters during continued economic uncertainty.

We urge the Chancellor to act now to avoid renters being scarred by debts they have no hope of clearing and a wave of people having to leave their homes in the weeks and months to come.

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Dr Rosalind Beck

10:43 AM, 18th February 2021, About 3 years ago

A few issues:

1. They don’t explicitly demand the arrears be paid directly to the landlord. If the money was paid to the tenants so that they could ‘manage their own finances’ it would be shambolic – they could spend it on whatever they liked while the arrears remained and grew.

2. What about the tenants who weren’t paying anyway and whose debt has nothing to do with the pandemic? Why are they not mentioned? Why should they be bailed out by decent tax-payers? On the other hand, the Government had permitted them to stay for lengthy periods rent-free, while some landlords have been ruined because of these attacks on their private property rights.

3. Many renters have done the right thing and paid even though it was a struggle – they get nothing for free and this will feel like a kick in the teeth.

4. Lastly, what about the tenants who won’t make the claim – whether out of malice of laziness? It is the landlord who loses out; so they should have some power to make the claim.

And I say all this, despite having been the first person in the UK to advocate for tenancy loans rather than push for landlords having to bail out their tenants by taking on further mortgage debt (misnamed ‘mortgage holidays’) – which had been the previous approach.

I’m just saying that it’s not as simple as it sounds, once you get into the details of how it would work and also the ethics and fairness of it.


11:57 AM, 18th February 2021, About 3 years ago

If rent loans (or gifts) are not paid direct to the landlord then the government will not have achieved its objective.

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