A Welsh politician has slammed the region’s new loan scheme as a potential cause of further debt for tenants already struggling to pay their rent.

Plaid Cymru shadow housing minister, Delyth Jewell (pictured) MS, says offering a loan to someone in rent arrears replaces one type of debt with another.

“In all cases, the recipient of the loan will have to pay interest on that loan, and for that reason, I would question whether this is really designed with the tenant in mind,” she says.

Last week, the Welsh Government kicked off its six-month long Tenancy Saver Loan Scheme, offering 1% APR interest loans over five years, paid directly to landlords or letting agents and overseen by the Wales Council for Voluntary Action.

Better course

Jewell adds that rent controls along with the aim of reducing the private rented sector through increased social housing and proper regulation would have been a better course of action.

“Ultimately, the real winners of this Welsh Labour Government scheme are private landlords, and the people of Wales whose only option of housing is via the private rented sector, will suffer as a consequence,” she says.

While the scheme doesn’t cover England, agents surveyed in the latest Safeagent research echo Jewell’s comments, warning that many landlords would only focus on the short term of current arrears being paid off, rather than the longer-term financial impact which could cause tenants to then fall behind with their rent as they struggled to pay off the loan.

Nearly half of respondents (44%) felt they added to tenants’ financial problems.

National Residential Landlords Association chief executive, Ben Beadle, backs the Welsh loans and says: “We would advise every landlord with a tenant in arrears to make sure they are aware of the new scheme and advise any landlord in receipt of these payments to commit to working with their tenant to maintain the tenancy in the long term.”


  1. Anything that increases the ability of tenants to pay rent, will lead to an increase in rental income and a subsequent increase (or reduced fall) in house prices.

    I doubt many of these government “loans” will be repaid, as by design they will likely be made to the least financially secure tenants.
    At a low APR of 1%, a tenant could take the loan and invest in corporate bonds or dividend paying equities and keep the profits.
    (I seem to remember the investment banks doing similar with their “bail out” in 2008).

    This is just more kicking the can down the road, to try to prevent a drop in asset prices. Because the politicians are frightened that their voting base won’t like asset price deflation. So the bubble continues…

  2. Given that many tenants are struggling with rent at this time how else do you keep them in their homes? LLs should not have to bail out tenants who can’t afford the rent and many would eventually be evicted if this loan scheme were not in place.

    It may not be perfect, and some who take it will presumably default, but others may be able to use it whilst they get back on their feet and it will mean they can stay in their homes.

    It is easy to criticise, but where are the alternative proposals? If LLs cannot collect their rent they will ultimately evict tenants and sell up, leaving people homeless and fewer properties available to renters.

    • If a landlord evict tenants and sells a property, it does not necessarily mean one less property available for rent.
      Someone will probably end up living in the property.
      A new landlord may come in and buy the property at a lower price.
      Even if the rental income has now dropped, the reduced purchase price may mean the yield is similar.

      There’s no reason this couldn’t happen with the original tenant remaining in place. The landlord sells to another landlord, who accepts a lower rent from the same tenant.

  3. Well in these situations someone has to take the hit.
    It’s a zero sum game.
    It could be the tenants, the landlords, the banks or the government.
    If the government takes the hit, it will either take the money from private assets (taxes etc) or through currency devaluation.
    I think it will be the currency that takes the hit. So that’s anyone holding fiat currency or bonds.


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