Warning sounded on rent arrears after lockdown

Warning sounded on rent arrears after lockdown
Credit: Jason Alden/Bloomberg

Thousands of tenants and landlords could be facing rent arrears on the back of the third national lockdown currently underway, a group of organisations has warned.

A joint statement by the National Residential Landlords Association, 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.

The statement continued: “Renters, landlords and letting agents cannot be expected simply to muddle through indefinitely where they face these financial difficulties. The government needs to develop an urgent package to help renters in paying off arrears built since March last year.

Article continues after advert

“Without further action, debts will continue to mount, making it far more difficult to sustain tenancies and keep renters in their homes after the pandemic.”

Sarah Pennells, head of financial capability at Royal London, said there was a “gulf” in the financial support available to homeowners compared to renters.

She said: “People who are struggling to pay their mortgage can apply for a mortgage holiday until the end of March, but those who are struggling with their rent don’t have the same support.

“Instead, it’s down to their landlord to decide whether they will agree to a rent reduction, or to allow arrears to build up. Renters in arrears are at the mercy of their landlords.”

Under government guidance for landlords and tenants, no eviction notices are to be served in any tier in England until January 11 at the earliest and, given the 14 day notice period required, no evictions are expected to be enforced until January 25 at the earliest, except for “most serious” circumstances.

A November survey for Citizens Advice indicated that half a million private renters were behind on their rent.

It added that a quarter of respondents with rent arrears had been warned of eviction, termination of their rental contract, or handed an eviction notice despite current rules.

The charity has called for a legal ban on bailiff action and a pause on all possession proceedings during the national lockdown in England and in tiers 2 and beyond January 11.

It warned that an “avalanche” of evictions could take place in the spring without further help for renters.

Citizens Advice has also called for targeted financial support for people in England who have built up rent arrears.

The charity suggested the government consider a system of grants and government-backed loans to help people repay rent arrears “sustainably” and stay in their homes.

Alistair Cromwell, acting chief executive of Citizens Advice, said: “As coronavirus restrictions once again tighten for everyone, the government must not forget the struggles of private renters.

“They currently face the prospect of losing their home once the eviction ban ends next week and the debt they have built up is likely to cast a long shadow over their future.”

Mr Cromwell added: “Even though many landlords are trying their best to support their tenants, thousands of renters could face eviction in the coming months without further help.