The National Residential Landlords Association (NRLA) says its proposed government-guaranteed hardship loan scheme to help pay off Covid-related rent arrears in England will prevent evictions and save tenants money.
The government has so far ruled out introducing a similar scheme to those running in Scotland and Wales. But the NRLA believes its plan wouldn’t increase debt for tenants, but would simply transfer the existing debt from the landlord to the loan scheme.
Making it interest-free would reduce the debt compared to borrowing from other lenders who would charge interest.
It suggests that eligibility should be based on whether a household was able to meet a standard affordability assessment before March 2020.
Repayments would then be made in line with the recovery of the tenant’s income using a similar model to that used for student loan repayments.
The NRLA also believes that there is an urgent need for the courts to speed up the way they handle legitimate possession cases and that in future the process should be ‘digital by default’ unless there are clear reasons why this would not be appropriate.
Its new report on the state of the PRS warns that without financial support to tackle Covid-related rent arrears, Chancellor Rishi Sunak is forcing landlords into a corner; they either have to accept continuing to receive no income or resort to repossessing their property.
Most landlords (60%) feel their rentals business will be negatively affected as a result of the pandemic, with 34% saying their rental income has been impacted.
Chief executive Ben Beadle (left) says: “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.”