Rental Debts Reach an All Time High

As a new variant looks set to threaten Christmas yet again, anxiety is heightened. However, the pandemic ramping up isn’t the only concern to tenants at the moment. 

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Research by the NRLA reveals that in the PRS, the impacts of the first COVID wave are still being felt loud and clear, with rental debts increasing by 14% since May. 

A survey of over 2,000 private renters in England and Wales has revealed that the average rental debts have really racked up as a direct result of the pandemic. Back in May, tenants owed an average of £900, this figure has shot up to a whopping £1,270, according to the data – with over 430,000 tenants admitting to owing their landlords money. 

Tenant support

Many landlords are concerned about letting to tenants in receipt of Universal Credit, however this report may prompt a rethink. Nearly 60% (57%) of tenants with outstanding rent payments due were not in receipt of government support via Universal Credit. This leaves the tenant unable to claim any additional one-off payment boosts, such as Discretionary Housing Payments to help clear a backlog. 

The Government has made a pot of funds available for councils to help vulnerable renters who have found themselves hit hard by the pandemic. The NRLA has vocalised the importance of making sure that this pot of cash should be directed to tenants who are unable to access housing benefit support, and are often forgotten. 

Ben Beadle, Chief Executive of the NRLA, comments: 

With the Government having made funding available for affected tenants it is now vital that councils get this to those affected renters as swiftly as possible. In doing so they should prioritise those not eligible for emergency housing benefit support. This course of action is the best way to sustain tenancies and keep people in their homes.

rental debts during covid 19

A perfect storm

However, 59% of the Universal Credit recipients surveyed expressed concern about the recent government decision to cut payments by £20 a week, and how it could impact their ability to manage cash flow and pay all of their costs. 

The NRLA is also calling on the Government to reverse this decision to freeze the housing cost support element, so that rent payments do not slip, and both tenants and landlords can be confident in the security of their tenure in these turbulent times. 

Ben Beadle said: 

The NRLA is concerned that tenants with outstanding COVID related rent debts are seeing these arrears increase. Whilst landlords have done all they can to support affected tenants, they simply cannot afford for this situation to continue indefinitely.

Take control

Whilst government support for the most vulnerable tenants is a good step forwards, in these uncertain times, we should all do all we can to protect ourselves, and those around us. 

Over 60% of landlords have admitted to having to offer at least one tenant a rent-free or delayed rent period in the second quarter of this year. Whilst tenants may be scraping by using their savings, landlords don’t have to do the same in order to support their tenants through this period. 

A rigid rent guarantee insurance is the safety net you and your tenant can rely on, should the road get a little bumpy.

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