Calls for support as furlough ends and arrears rise

Concerns are growing among tenants as the furlough scheme comes to an end, just as restrictions on evictions fall away. 

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The Coronavirus Job Retention Scheme, or furlough, ended on 30th September 2021, leaving some tenants facing potential redundancies as businesses struggle to regain their footing after the pandemic.

Falisha is a young graphic designer and spoke about her concerns. She said that her manager has stated that there are no plans to reopen the office this year, but he has not stated what will happen to the employees. Everyone of them has rent to pay, a family, and mouths to feed. She mentioned that they’ve been left in the dark, with no idea whether or not they’ll have work today.

Chancellor Rishi Sunak, is expected to speak more on the situation. In a statement today he said:

The Government will provide a lifeline for those at risk of struggling to keep up with their bills over the winter.

Official advice released by the UK Government’s website states that: — If tenants fall into financial difficulties due to a change in their employment status or earnings, they may qualify for Universal Credit, which can include help with housing costs.

According to ICM research :

  • nearly one in ten private tenants in the UK (up to 350,000) are struggling to find their rent on time every month. In the last few months,
  • the average amount of arrears outstanding has increased by 24% ,from £730 in November 2020, to £907 in April 2021.

It is clearly on the mind of many, with Citizens Advice revealing that in the first four months of 2021, their advice online for housing was viewed over two million times.

Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA) is concerned about the fallout from today. He 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 today.

The official government advice to tenants is to ask your local council for help it says that renters in the private and social rented sectors, who are entitled to Housing Benefit or the housing element of Universal Credit and require further financial assistance towards housing costs, should contact their local authority.

Tenants who have been propped up by the furlough scheme will also be concerned today about their other bills and not just the rent. The Government’s advice today on domestic bills said:

Support is also available to help individuals to continue paying other household bills, such as council tax. Every council has its own local council tax support scheme, to provide reduced council tax bills for those least able to pay. The government has provided councils with £670 million of new funding to enable them to continue providing this support in 2021-22, at a time when more households may be experiencing financial hardship.

The advice for tenants needing assistance paying their rent is to speak to their landlords and Jobcentre Plus (JCP), on individual arguments for help with rent.

So what should a landlord do if your tenant has been hit by this situation, or indeed any financial issues? 

  • We find the best thing to do initially is approach every conversation with compassion – your tenant doesn’t want to be facing this issue any more than you want them to be!
  • Have a clear and open conversation about their current plans and financial situation, and see if there is any wiggle room for some leeway. 
  • Be open about your needs, and try to be flexible with theirs, wherever possible. There’s no point holding them to ransom over a tenancy that they simply can’t afford, sometimes it is simpler to agree to part ways. 
  • Be prepared! Good rent guarantee insurance is designed to help overcome bumps in the road like this, make sure you are covered. We can help with this, if you need some advice. 

The bad times won’t last forever, but this is a really worrying time for thousands of people and as landlords, there are real concerns about not only your own finances, but also how best to support your tenants. Stay open, and keep communicating – all we can do is support each other as best we can. 

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