A new ‘breathing space’ scheme to give people in debt time to get proper professional advice and reduce the stress caused by impending legal action is set to go live next year following a consultation.

The Debt Respite Scheme regulations – which cover most debt including rent arrears – aim to give them a better chance to stabilise their finances during a 60-day moratorium on interest, charges and enforcement action while they seek help. It will take effect from 4th May 2021.

They could then enter a statutory agreement to repay their debts to a manageable timetable and would get legal protection from creditor action during this time.

The National Residential Landlords Association says while landlords would be restricted from using the rent arrears grounds under section 8, a tenant would still have to pay their ongoing rent.

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Deputy director of campaigns Meera Chindooroy tells LandlordZONE: “The aim of the scheme is to provide the tenant with the space to agree a payment plan – landlords have a measure of confidence that the tenants who enter into it will engage with the process.”

Citizens Advice agrees that it’s an enlightened approach to debt management and will no doubt help many people struggling to make ends meet. But it adds that many tenants will need help with their finances long before the scheme is up and running next Spring.

The Government says that those who need debt advice often don’t seek it, and those who do get advice often don’t get the best experience because they leave it too late when their situation is at crisis point.

Debtors receiving mental health crisis treatment will also be able to enter a mental health crisis moratorium without engaging with this debt advice.

Protection will apply for the duration of their treatment and then for a further 30 days. If eligible, debtors can then access the 60-day moratorium.

Debt charity StepChange welcomes the move which it says demonstrates an increasingly enlightened approach to the treatment of people experiencing debt problems. Head of policy Peter Tutton says:

“We look forward to working on the detail of implementation constructively with the Government, to ensure that it fully meets the policy objectives of getting more people to the debt advice that they need, and then giving them a period of calm in which to begin the process of reaching a suitable solution to their problems without fear, harassment, intimidation or escalating cost.”

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25 COMMENTS

  1. So for 60 days the tenant gets an interest free loan funded by the landlord? Should I increase my rent or insist everyone has a guarantor? Should I only let to couples so if one has mental health issues the other is responsible for the rent? What happens if the landlord also has mental health issues? Is it tit for tat?
    Mr Tutton says “to begin the process of reaching a suitable solution to their problems without fear, harassment, intimidation or escalating cost.” But this only seems to apply to the tenant but not the landlord.

  2. Could not agree more. How on earth does a Landlord cope without the rent. For the whole of last year we made less than 2K profit. We had problems, bad workmen who charged us for work that did not solve problems and we are in a low rent part of Wales. How do these so called well paid “experts” suggest we cope. Can we go to the supermarket and say we want you to supply us with food, but sorry times are hard and we cannot pay. We would be told to get on our bike. WHY IS IT DIFFERENT FOR LANDLORDS? We rely on this income to live. We are pensioners. Nobody cares. The NRLA are in bed with the government Rent Smart Wales is government contolled. There is no one to fight for good Landlords. We would sell but the taxes would hardly give us any profit. How are we supposed to live?

    • Yep I agree with you there is no help or support that are doing the right thing, If you are good landlord dont make a difference. there a lot of support for tenant not for landlord. this is a joke the government need to sort out there act. This is the same thing with issue with tenant not making payment for damages that create as you have to go to DPS but you can only get your money if the tenant agrees if they dont then you have to get a judge to sign a witness form before you can go through this process. this is a long process. The Tenant should get affect that caused the damages for landlord property. as they will normally get a way with it.

      • I have a one flat which is sublet as part of my leased commercial property, the tenant has paid no rent 12 months now, and still not paying since he knows he doesn’t have to and legally we can’t do anything. It’s brought

    • I cannot believe what they are all doing to us… tenants are getting the upper hand and fairness has gone out of the window. I have had two tenants just not paying rent and sitting in my property, nothing at all to do with Coronavirus, sticking two fingers up with Government collaboration… they were all told not to pay any rent for 3 months, and we can’t even get them out for months when they don’t pay… I think I’m going to start asking for a guarantor from now on… and I will be selling up and getting out sooner rather than later…

      • You can start the process , what you can do is sue for non payment of rent get a county court judgement against them, chances of getting accomadation then will be zero

  3. Luckily been streamlining my properties, realising good times and timing. Anticipate cycle turning and that govt. would soon want their cut, its been in the wind for a while. Despite talk about rising rents and increasing demand, with the economy as it is how will tenants pay ? if non payers are eventually evicted (will get harder) where are the new solvent tenants coming from ? From a market perspective the market has to adjust with lower rents. From an interventionist perspective Govt. is going to be under pressure to house and with reliance on private sector without increase in benefits and probably reduced incomes, we are going the way of rent controls and capping. Combine with less favourable lending, costly and less insurance products, increasing admin costs for new tenancies (which will not be able to be absorbed tenant side), all it needs is a bit of a shock interest rate rise…..see all the property investment seminars and such have dried up, that’s where the money was but missed out on that ! Meanwhile I am looking for the next lucrative opportunity. All ideas welcome !

  4. We only have one property and the tenant has already been served notice due to being consistently 5 months in arrears! Now we can’t evict until the ban is lifted and in the meantime the arrears build.
    To issue a section 8 notice the tenant must be in a minimum of 8 weeks or 3 months arrears anyway, to add a further 2 months could see some landlords 5 months in arrears with their buy to let mortgage. 6 months in arrears is a default and the start of repossession.
    Having worked in debt advice/collection for 20+ years, I can advice this won’t change behaviours but kicks the can down the road and over to the landlord.
    We charge the local housing allowance for our rent, and haven’t increased for 5 years, when this comes in we will need to increase it significantly with a longer view to selling the property.

  5. Unbelievable!!! What about mortgage payments??? If tenants have arrears and given even more time for free living why not to take it!!! It should be going different way-missed one month-OUT fast!! Why to facilitate this type of attitude?!?!

    • You would see rent arrears plummet if after 14 days of late payment you could apply for immediate eviction but thats never going to happen , thats why my brother and i have decided to sell up its just not worth the hassle any more

  6. So what happens to the mental health of a landlord when he goes bust and properties snatched back by mortgage companies because tenants have not paid the rent this is my only business if it failed because of this I could not pay the mortgage on my house I live in and I could not support my wife and family
    This is totally nuts we have had enough persecution the losers will be landlords We will sell up and reduce the amount of properties for rent on the market which will bugger those who want to rent 😡

  7. This is going to backfire big time on the government. Landlords will sell up, but it will most likely be to owner occupiers not to other Landlords. The number of rental properties available will contract. They will end up in a worse position than they currently are with housing supply.

  8. So now LL are definitely going to keep capital available to cover for this new 60 day rent arrears moratorium.

    Why should the supplier of accommodation services have to waste working capital to cover for tenant fecklessness!?

    Surely it should be for tenants to supply a far larger deposit to cover for such 60 day rent arrears!?

    How about when I go shopping I pay for the groceries 60 days later!?
    The retailer would need substantial capital amounts to cover for 60 days before goods were paid for.

    Yet again we have Govt using LL capital as free lending for feckless tenants.

    My new DD processes will require a tenant supplies evidence of at least 6 months of savings or credit card limits unused equal to 6 months of rent.

    No way is my capital going to be used as free money for 60 days.
    So feckless tenants get saving or no tenancy with me!

  9. Yet more help for tenants. I am a pensioner topping up my pension with a 1 bedroom bungalow as my pension is so low who subsidies me ? No help for Landlords or pensioners in this country.

  10. The trouble with this strategy is not all landlords have deep pockets, and even if they do there comes a point when providing property for rent is too risky because the rules are so heavily stacked against the landlord, and unreasonably so. Big finance companies factor in a degree of loss and forbearance into their rates, so, whilst a small number default, the balance of their borrowers are still paying and mitigating their loss. Given most landlords have one or two properties, to apply the same model completely fails to consider the landlord’s situation, where they could lose 100% of their revenue.

    The anti-landlord brigade tout the idea that as landlords we are responsible for our tenants (to the degree we are now required to be lenders and social workers). The argument goes something like this; having a home is a fundamental right. Depriving someone of their home is to be avoided at all cost and Landlords have a duty of care to their tenant including taking whatever steps we can (or legislated to) to avoid eviction. Money problems, unemployment, mental health etc, all the causes of rent arrears, are issues for the state to support and deal with. The state argues, as landlords, we have a social responsibility, which is the ultimate hypocrisy since all they do is abrogate their responsibility to deal with the causes of rent arrears, kick the can down the road and lay it at the feet of landlords, whether they can afford it or not. But why would they concern themselves with the plight of the landlord, when all sides of the political spectrum are happy to play to the gallery of renters (read voters).

  11. We have decided to sell up, its getting to the point that renting is no longer viable all the additional upfront costs , electrical inspections each time a new tenancy (which can be as little as 6 months) credit reports contracts, advertising letting agent fees and the enevitable repairs required every time a tenant leaves , redecoration. Plus it looks as though the chancellor will be using the private rented market as a cash cow to finance covid.

    • The electrical certification is only once every 5 years. You only have to provide evidence of your certification as prescribed documentation at the commencement of the tenancy.

      • Yes i Know, however if you issue a new contract, have new tenants it has to be redone. If you allow a tenancy to roll over into a periodic , if your tenancy agreement specifies this no problem if however it doesnt and it happens automatically as per legislation its deemed a new tenancy so you need the EICR redone , effectively you could be having an inspection every 6 months , certainly every twelve months unless your contract is clear about periodics . Another issue is the wording of the rules all tests must comply with 18th edition standards, these are new regulations that came out about 6 months ago many electricians are coding these properties C2 which means they need rectification within 28 days when if you delve a little deeper thats not always the case as the regs state that just because the system is not to current specs it doesnt mean its unsafe however this is one line buried deep in a rather hefty 100 plus page document , i know i’ve read it . Systems are being C2 just because wiring is red and black or plastic consumer board, or lights are not rcd protected , these should be C3 which means its only a recomendation to change . Many landlords are going to end up paying out substantial sums without the ability to charge rent , that policy is active now for new tenancies and April 2021 for existing tenancies,

  12. Yet another cheap way for the Government to try to win votes. Landlords are treated like scum these days while the tenants now just have more ammunition to get away with murder, ( financial murder of Landlords) who without them would be on the streets, on in some crumby bedsit while they wait for social housing.
    The unscrupulous tenants will all soon all have mental health issues then, and start play that card.

    I think rent guarantors is got to be the way forward now, so at least you have a chance to get your money back. I will certainly looking into this, with a clause that at 2 month owed rent, the guarantor is liable.

    • My tenant was 5 months in arrears before lock down issued section 8 in march and just been informed wife had gone bankrupt nearly a gear ago when the problems started, where does this leave me?

  13. Maybe the plan is to incrementally squeeze the LL so hard that it becomes impossible to make a living from being one . LL’ s sell up in droves plus mortgage companies repossess thousands of houses of ordinary skint home owners, prices of houses crash through the floor , Govt swoop in and buy them all up for peanuts , and then have a ready made supply of council houses once again.

  14. Some strong messages above the government needs to take notice of.
    Also Is it illegal to put the cost of a selective licence onto the rent ? My local borough has started this , plus regarding periodical licence, my tenants have had one since Oct 2018 , original tenancy taken out Oct 2017 and reading above it seems you need a electric certificate which is also what a selective licence calls for

  15. I wonder if only letting to tenants with guarantors is the way to go. That way you chase the guarantor for unpaid rent, not the tenant. I know there aren’t that many tenants who have a suitable guarantor, so perhaps less suitable guarantors eg not homeowners, might be the way forward.

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