Around 840,000 private renters in England and Wales have built up rent arrears since lockdown measures began, according to new research.
A survey of tenants for the National Residential Landlords Association, carried out by research consultancy, Dynata, suggested that seven per cent of all private renters had built arrears due to Covid.
Whilst the average arrears were between £251 and £500, the survey found that 18 per cent now have rent debts of more than £1,000, equating to 150,000 individual renters across the private rental sector.
Tenant trouble: The data suggests more renters are falling into arrears with their landlords
Figures provided by the charity, Shelter, have also shown that the number of renters in arrears has more than doubled since August last year.
’11 million people rent in England – and the pandemic has revealed how insecure private renting can be,’ said Polly Neate, chief executive of Shelter.
‘Hundreds of thousands have been pushed to the brink, struggling to pay rent due to job losses or reduced working hours.’
‘As the economic shockwaves of the pandemic continue, the situation will get worse if the government doesn’t act swiftly,’ said Neate.
The self-employed who rent were most likely to be in arrears, according to the NRLA research, with 17 per cent saying they had developed rental debts since March.
In terms of age groups, the survey found that younger people were most likely to have been affected, with 14 per cent of renters aged 18 to 24 having built arrears since March.
The West Midlands had the largest proportion of rental arrears across England and Wales with 11 per cent of tenants having built rental deficits since March.
The next worst hit area was London, where nine per cent of renters reported accruing arrears.
Over the course of the pandemic, tenants have been far more likely to see their income fall than homeowners say Hamptons.
‘Our research highlights in stark terms the rent debt crisis now engulfing the rental market,’ said Ben Beadle, chief executive of the NRLA.
‘Ministers need to accept that simply banning repossessions does nothing to keep tenants in their homes long term.’
‘It will achieve the complete opposite, as kicking the can down the road just means larger debts piling up, creating a bigger problem for tenants and also for landlords.’
The NRLA is asking the Government to provide tenants with guaranteed interest-free hardship loans as well as boosting benefit payments.
‘To sustain tenancies the Government needs to provide an urgent financial package to get rent debts accrued during the pandemic paid off,’ added Beadle.
Tom Mundy, chief operating officer at lettings technology company Goodlord believes that today’s figures are a true reflection of what is being seen across the UK’s lettings market.
Mundy warns that without intervention from the Government, there will likely be mass evictions and huge pressures on the courts come spring.
What is the advice for renters in arrears?
The most important thing is to keep lines of communication open with your landlord.
‘Be open and honest and see whether a mutually agreeable plan can be created with your landlord or letting agent,’ said Mundy.
‘Burying your hand in the sand over rental arrears won’t help anyone; once the courts start allowing eviction procedures to move ahead, your debts will catch up with you.’
‘Receiving a Country Court Judgement can stay on your credit record for up to five years, which can have a whole range of repercussions in other areas of your life,’ he added.
‘Crucially, having over six months worth of arrears means any eviction processes can be sped up once the ban is lifted – dropping from six months to four weeks’ notice.’
‘Look to keep any debts below that threshold if you’re hoping to stay in your current property whilst paying back your debt gradually.’
What is the advice for landlords?
Landlords should have rental insurance in place, and where your tenant is in arrears, take professional legal advice.
‘For landlords who are not receiving rental payments but still paying out on mortgages, this is a particularly stressful time,’ said Mundy.
‘Having rental insurance in place could help cover landlords for a certain amount of missed rent and any legal costs.’
‘We also strongly recommend that landlords take legal advice as it is vital to have trusted guidance from someone who understands this area and can help you deal with it properly and legally.’
Meditation and looking to compromise via repayment plans should always be the first port of call though, according to Mundy.
‘For example, it’s worth considering negotiating whether your current tenant can move out ahead of the end of their lease if they’re unable to pay, as there is still strong demand in the market from new tenants.’
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