Private renters and landlords across the country are facing a cliff-edge as the end of furlough coincides with cuts to benefit support, according to the National Residential Landlords Association (NRLA).
With Bank of England warnings indicating that renters are more likely than any other group to have lost their jobs or been furloughed, the NRLA has warned that many more renters face the prospect of mounting rent debts.
A report published by the NRLA has found that, by the government’s own admission, the proportion of private renters in arrears tripled in the period from 2019/20 to the end of 2020 from 3% to 9%.
With furlough due to draw to a close at the end of September, alongside a £20 a week cut to Universal Credit (UC) and a continued freeze to housing benefit support, the NRLA said many more tenants are likely to accrue unsustainable debts.
It pointed to warnings from the Bank of England about the risks posed to the country’s economic recovery as a result of renters experiencing financial difficulties.
The NRLA also highlighted concerns about what impact a failure to tackle COVID-related rents debts could have on the credit scores of affected tenants, as well as the likelihood that they will be able to stay in their homes.
With the government having now admitted that many landlords “are highly vulnerable to rent arrears”, the NRLA said landlords cannot be expected simply to deal with non-payment of arrears.
The NRLA has called on the Chancellor to develop an interest-free, government guaranteed hardship loan to support the majority of tenants with COVID-related rent debts who are not eligible for benefit support.
This scheme would help these tenants to pay off their rent debts and would follow the introduction of similar schemes in Scotland and Wales.
More broadly, it has called on the government to scrap plans to cut UC payments to avoid the consequences for tenants across the country.
Ben Beadle, chief executive of the NRLA, said: “Many tenants and landlords have struggled to cope during the pandemic leaving them exposed to the impact of rent debts which they are unlikely to ever pay off.
“By ending furlough and cutting benefits in quick succession, and without the introduction of a targeted package to tackle COVID related rent debt, the government is worsening an already critical situation.
“Without transitional support, and as the country gets back to normal, the Chancellor will be turning his back on those renters and landlords in desperate need of help.”