Lockdowns push 7% of renters to build up arrears

Lockdowns push 7% of renters to build up arrears

About 7 per cent of private renters have built arrears since lockdown began in March 2020, according to a survey.

The data, compiled by research consultancy Dynata for the National Residential Landlords Association (NRLA), found more than 80 per cent of renters now in arrears were not behind on their rent payments when the pandemic began. 

The average amount of rent owed by those in arrears during the pandemic was about £900, with almost 30 per cent now owing £1,000 or more.

The NRLA warned that approximately 210,000 tenants may face severe difficulties in getting landlords to let to them in future, mainly because the arrears have damaged their credit scores. 

Earlier this year the NRLA, Nationwide and debt charity StepChange warned that “many thousands” of private renters and landlords across the country faced rent arrears due to the impact of the pandemic.

Ben Beadle, chief executive of the National Residential Landlords Association, said: “As the private rented sector moves out of lockdown measures, the chancellor has failed to provide tenants with the support they need. 

“This is especially the case for the majority of those in rent arrears who do not qualify for benefit support.”

He added: “Without urgent assistance, many tenants face the prospect of losing their home needlessly as landlords struggle to shoulder the cost of arrears. 

“Affected tenants also potentially face the negative impact of damage to their credit scores.”

The research showed that a quarter of those with arrears said their landlord had attempted to reclaim these by seeking a court order. 

Such orders, where successful, damage a tenant’s credit score, making it harder for them to access new housing in the future.

The NRLA said the majority of tenants in arrears do not qualify for emergency housing support provided by councils to help those in receipt of benefits. 

Beadle added: “The government needs to develop a financial package which ensures that benefits cover the rents of those in receipt of them. 

“For those who do not qualify for benefit support, an interest free, government guaranteed tenant hardship loan should be established, similar to those in Wales and Scotland.”

A government spokesperson told FTAdviser that renters will continue to be supported as emergency measures are lifted, with longer notice periods – of four months in most cases - in place until the end of September.

The spokesperson said: “Since the beginning of the pandemic, we have taken unprecedented action to support renters and help keep them in their homes including introducing a comprehensive £352bn support package, which has prevented widespread build-up of rent arrears.

“Thanks to the success of the vaccine programme, national restrictions are gradually being eased and it’s now the right time to start to lift the emergency measures we put in place.

“Tenants will continue to be supported with longer notice periods and financial help is still available such as the furlough scheme, which has been extended until the end of September.”