Government Help With Rent Arrears During COVID

Written By PropertyLoop
February 12, 2021

In October of 2021 the Joseph Roundtree Foundation reported that around 3.8 million low-income households across the UK are currently in arrears, with 4.4 million households having to increase the amount they are borrowing to meet their rental obligations. Across the initial months of 2021 numerous tenant’s rights groups and homelessness, campaigners made calls for the Uk government to offer better financial support to struggling tenants, requesting a financial package that would allow struggling renters to clear the arrears they had accumulated during the pandemic. Alongside looking to help both landlords and tenants maintain their existing tenancies these calls for support saw the groups urge the government to organise a “welfare system that provides renters with the security of knowing that they can afford their homes.” However, with Universal Credit payments being recently slashed, those hardest hit by the outbreak look to be left ignored. 

What to do if tenant become unable to pay their rent due to the pandemic? PropertyLoop

The UK government has recently unveiled a £65 million financial support package for vulnerable renters over the winter months. The department for levelling up housing and communities has encouraged local councils to utilise the new funding to support low-income households that have fallen behind on their rental payments over the COVID outbreak.  

The chief Executive of Crisis, Jon Sparkes stated, “We, of course, welcome this funding that should help keep some of those most at risk of homelessness off the streets this winter. It is now vital councils use this funding to help people most at risk of losing their home. 

“But with almost a million households across the UK in rent arrears and the cost of living rising rapidly, it is impossible for this funding to meet the demand we face. To prevent homelessness in the first place, we desperately need the UK government to ensure that housing benefit covers the true cost of renting by unfreezing the Local Housing Allowance.” 

What to Do if a Tenant Becomes Unable to Pay Their Rent During the Pandemic? 

Over the course of the pandemic the UK government has maintained its stance on rent arrears, and how landlords should approach the situation with their tenants. Owners have been encouraged to negotiate with their occupants, seeing payment holidays or a rent reduction be put in place to allow the tenant to begin to repay the overdue amounts at their own pace, without worsening their situation and maintaining the landlord’s income.  

If an agreement is proving difficult to reach tenants may be able to receive financial support through the benefit system and universal credit. It is possible for this monetary support to be paid directly to the landlord helping the tenant to address their arrears, and give the owner assurance they will be repaid.  

Landlord Losses During COVID 

Recent research carried out by BVA/BDRC on behalf of the National Residential Landlords Association, revealed that a staggering 61% of all landlords that offered financial relief to struggling tenants in the second quarter of 2021, took on the losses through their own savings. Further to this recent government findings have shown that over half of all landlords are dependent on a single rental property for their income, the NRLA are now making their position clear, stating that rental property owners should not be dependent on covering their losses from their savings, warning that these moves would not be sustainable for tenants still struggling from the COVID outbreak.  

Between the months of April and May 2021 an eyewatering 800,000 tenants were behind on their rental payments, a figure that is more than double that of the recorded numbers in pre lockdown 2019, revealing the extent of the financial unrest caused by the pandemic and how this has prevented many from affording their rent.  

Chief Executive of the NRLA, Ben Beadle commented that, “These figures show the extent to which landlords have worked to sustain tenancies as a result of the pandemic, many at the expense of their retirement savings. But this cannot continue indefinitely. 

“After months of calling on the Government to help tenants who through no fault of theirs got behind with their rent, we have welcomed the funding now made available to help those affected to pay off COVID rent arrears. 

“It is now vital that councils ensure tenants who need it can access the funding swiftly. Without this, landlords will be left between a rock and a hard place either expected to sustain rent arrears they cannot afford or to repossess their properties, neither of which we want to see.” 

Eviction Ban UK Update PropertyLoop

Can Landlords Increase Rent During COVID 19? 

Unfortunately for aspiring tenants, as it stands landlords are able to increase the amount of rent their tenants are expected to pay during the covid outbreak. Whilst the UK s arguably emerging from the pandemic, the fallout is still being realised, with the former UK shadow chancellor John McDonnell urging rent to be frozen for the coming year across the private rental sector.  

Despite numerous reports of landlords facing record losses over the pandemic, it is unlikely that owners will look to recoup these losses through imposing a rent increase on the very same tenants that need the support, or risk such a move on new tenants in the current financial uncertainty. 

However, an increasing number of landlords are now seeking additional financial security as the tenant enters into the agreement, often demanding that renters pay as much as six months rent in advance before moving into their new home. 

Can Anyone Be Evicted During COVID? 

To the relief of many rental property owners, the widely divisive eviction ban has been lifted, allowing landlords to take measures to repossess their rental properties, with the notice period having been returned to pre-pandemic levels. As of the 1st October 2021 landlords have been required to give at least 2 months’ notice when issuing their tenants with a section 21 notice of eviction; however, it is worth noting that in the instance where the eviction is due to rent arrears, owners are only obligated to provide two weeks notice. If the tenant remains with the property once this period has expired the lanldord is able to call upon bailiffs to enforce the eviction, but if the tenant is showing signs of infection or is currently self-isolating the eviction will be pushed back a week.  

Am I Liable to Pay Rent Until the End of the Contractual Notice Period During COVID-19?

Regardless of a tenant’s financial outlook, it is imperative that they continue to pay their rent even in the midst of the pandemic. Many tenants have come to agreements with their landlord, allowing them to pay a reduced amount of rent each month until their income is more secure. By simply refusing to pay rent tenants will be in breach of their tenancy agreement, allowing the landlord to move for repossession of the rental property.  

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With PropertyLoop landlords will have everything they need to let out their rental from start to finish, with no hidden fees, financial barriers or catches; only a revolutionary new way to let.

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