The government placed a ban on tenant evictions last year in order to protect renters whose income and employment status was being negatively altered by the Covid-19 pandemic and national lockdown. But as we mark the one year anniversary of the ban, a stark warning has been issued that the whole endeavour may be badly flawed.
Research completed on behalf of the Nation Residential Landlords Association (NRLA) tells us that 840,000 private rental tenants have built rent arrears since lockdown began in March 2020.
The government anticipated that this would happen, and so made it illegal for landlords to evict tenants except in the most serious of cases.
While the objective was admirable – protect renters in a time of national, neigh, global emergency – it seems a lack of foresight may also mean it is about to backfire.
With no danger of eviction, tenants have been able to build up larger and larger amounts of rent arrears over the past 12 months. When the ban on evictions is finally lifted, a process which will begin in June, these tenants will be unable to repay their arrears and will therefore face eviction.
As a result, the UK could see a deluge of evictions taking place, with thousands left in search of new homes while large amounts of debt weigh them down everywhere they go.
60% of landlords say they have already lost rental income as a result of the pandemic, 39% of whom say the losses are getting bigger by the day.
As such, the NRLA is now calling for “an urgent financial package to pay off rent debts” accrued as a result of the pandemic.
The NRLA suggests that this package should take the form of government-guaranteed, interest-free hardship loans for tenants who are now in debt but don’t qualify for existing benefit support. For those who are already on benefit, the NRLA is calling for grants to be made available.
NRLA Chief Executive, Ben Beadle, says:
“Whilst many landlords and tenants have worked well in responding to the challenges posed by the pandemic, we are now at a crunch point.
“As the country follows the roadmap out of lockdown, so too emergency measures in the rental market will need to be eased.
“Ministers need to ensure the tenants have the financial means to pay off rent debts built as a result of the pandemic. Without this, they will have to accept the inevitable consequence of rising homelessness and damaged credit scores.”