Posts with tag: rent debt crisis

NRLA poll reveals number of landlords hit by rent losses due to COVID

Published On: January 27, 2022 at 9:40 am

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Categories: Landlord News

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A poll by YouGov for the NRLA has found that, between March 2020 and September 2021, 23% of private landlords lost rent due to the impact of COVID.

This included 11% who had negotiated rent reductions and temporary suspensions of rent payments with some of their tenants. 8% had major issues with unpaid rents with at least one tenant and 4% had experienced an increase in empty properties during this time.

Amongst those who said they had lost rental income because of the pandemic, 54% said they had lost up to a fifth of their income across their portfolio. 5% reported that they have lost more than half of their rental income.

The figures show that 36% of landlords who lost rental income as a result of the pandemic said they planned to either exit the market completely or sell a portion of their portfolio.

The NRLA argues that this is further proof of the need to help tenants get COVID related rent debts paid off to keep landlords in the market and tenants in their homes.

As the Government made funding available for councils in England to help tenants pay off Covid related rent arrears last year, the NRLA says local authorities need to ensure money reaches the pockets of affected tenants as swiftly as possible.

Ben Beadle, Chief Executive of the NRLA, comments: “Today’s (26/01/2022) figures show the extent to which landlords have been hit by the pandemic as we have been warning over the last two years. With confirmation that those most affected are more likely to leave the market, it is vital that the rent debt crisis does not worsen the rental housing supply crisis we now face.

“As a matter of urgency, councils need to make use of the money they now have to help tenants get COVID rent debts cleared. Without this, renters face a bleak future of fewer properties to rent and, ultimately, higher rents.”

Private rent debts double during the pandemic, government data shows

Published On: October 18, 2021 at 8:21 am

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Categories: Tenant News

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The proportion of private renters in arrears in England has more than doubled during the COVID-19 pandemic, according to new government data.

The latest Household Resilience Study reveals that in April-May 2021, 7% of private renters were in arrears. This is up from 3% in 2019/20, amounting to over 780,000 renters.

An extra 9% indicated that they expected to fall behind with their rent payments over the next 12 months. This comes despite private rents falling in real terms.

With 27% of private renters reporting difficulties in meeting their heating costs in the same period, the National Residential Landlords Association (NRLA) is warning that many renters will struggle to pay off COVID related rent debts, especially with rising bills adding to their burden.

Ben Beadle, Chief Executive of the NRLA, has commented: “Landlords are being put in a difficult position. They either try to shoulder rent debts they cannot afford or seek to repossess properties as a final resort.

“Without a targeted package of support to pay off COVID rent debts, many tenants run the risk of losing their homes needlessly. They also face the possibility that their credit scores will be damaged, making it more difficult to access new housing in future.

“The Chancellor needs to address this crisis. His continued failure to act signals to the private rented sector that the Government simply does not care about the problem.”

Is the Chancellor making landlords scapegoats for the COVID rent debt crisis?

Published On: June 17, 2021 at 8:10 am

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The National Residential Landlords Association (NRLA) states that the Chancellor is making landlords the scapegoats for the COVID rent debt crisis.

A new report published by the NRLA outlines the toll that COVID-19 has taken on the private rented sector. It warns that without financial support to tackle COVID-related rent arrears, the Chancellor is forcing landlords into a corner. They either have to accept continuing to receive no income or resort to repossessing their property with all the consequences this course of action entails for tenants.

The NRLA is warning that the goodwill of landlords in the face of mounting rent debts cannot continue without support from the Treasury.

The report highlights over 800,000 people living in the private rented sector in England and Wales have rent arrears built since lockdown measures began, which are still to be paid off. Of this group, 82% were not in arrears prior to the start of the pandemic.

60% of landlords feel their lettings business will be negatively affected as a result of the pandemic, with 34% saying their rental income has been impacted by the events of the past year. Despite more than 9 in 10 landlords being individuals, and almost half renting out just one or two properties, among those who had offered at least one tenant a rent-free period or allowed rent to be deferred, 58% had absorbed the losses from their savings.

The NRLA says that the Government should introduce new measures to bring housing benefit support back into line with market rents. The private rental sector body highlights Government data from February 2021 shows 55% of private rented households in receipt of Universal Credit across the UK had a gap between that and the rents they paid. This included housing cost support. The average shortfall was £100 a month. Despite this, the Chancellor froze local housing allowance rates in cash terms from April this year, a decision the Institute for Fiscal Studies branded “arbitrary and unfair”.

The NRLA is calling for the Local Housing Allowance to return to covering the bottom 30% of market rents in any given area, and preferably increased so that it covers average rents.

For the majority of tenants now in arrears but ineligible for benefit support, the NRLA is calling for a hardship loan scheme to help tenants pay off rent arrears built since lockdown measures started last March. These should be Government guaranteed, interest free and repayable as the tenants’ incomes recover following the pandemic. The measure has the support of organisations such as the debt charities, StepChange and the Money Advice Trust, and Shelter. 

The NRLA believes this could help prevent tenants losing their home and stave off the difficulties caused by damaged credit scores. Of those tenants with COVID-related rent arrears, 26% said that their landlord had attempted to reclaim these through a court order. Such steps serve to damage a tenant’s credit score making it difficult for them to access new housing in the future. 

Ben Beadle, Chief Executive of the NRLA, comments: “The Chancellor has clearly decided on a strategy of making landlords the scapegoats for a crisis of his own making. For less than the cost of the ‘Eat Out to Help Out Scheme’ he could provide landlords and tenants with the financial support they need to keep tenants in their homes and prevent damage to credit scores.

“Landlords want to sustain tenancies wherever possible, but without the support so many desperately need, the Chancellor will need to accept the tragic costs of his failure to act.”