Covid and Rent arrears

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Should renters be given a Covid-19 rent-free period? questions answered

Surveys reveal that two-thirds of renters have seen their incomes reduced as a result of the pandemic, and an estimated third of renters are already, or expect to be, unable to pay the rent.

Most of us welcomed the Government measures to prevent landlords from seeking possession for a limited period, but there is a big concern that we’ll see a deluge of eviction cases when this period ends on 25 June.

Many landlords will conclude that their tenants will never be able to pay off the arrears and will seek to gain possession in the simplest way, using the s.21 or ‘no fault’ accelerated procedure which, in most cases, doesn’t even require a court hearing before the tenant is ordered to leave their home.

Some organisations are arguing that the Government should impose a ‘rent suspension’ during Covid, meaning that no rent would be due for this period.

This sounds an attractive solution, but it would be extremely hard (and probably illegal) to implement.  It would without doubt be challenged by landlords who would argue that the terms of the letting are a contract between the landlord and the tenant and the Government cannot override that.  The only answer would be for the Government to meet the full cost of the unpaid rent. People who’ve done the sums tell us that the cost of paying all rents would amount to £7.6bn a month and if it could be limited to those who are struggling financially due to Covid, the cost would be around £4.4bn.  To put this is context, the cost of running the whole of the NHS is £11.6bn a month.

Advice4Renters believes that there is a simpler answer.  Here is our five point plan.

First, Universal Credit/Housing Benefit must be reformed. It should be increased to at least 50% of average rents in the area.  The temporary Covid measures introduced have increased it to the lowest third of rent but this isn’t enough.  There are now so many renters forced to rely on benefits that there are not enough properties available in the lowest third of rents; and many renters took their tenancy when they were working and could afford a higher rent and now find themselves unemployed through no fault of their own. The rules for backdated benefit claims should be relaxed, as many of those whose income dropped suddenly have never claimed benefits before, and it has taken time for them to acknowledge that they would need to claim and then to find their way around the benefits system.

Second, the budget local authorities have to pay Discretionary Housing Payments should be increased to meet one-off needs among those who need additional payments due to individual circumstances.

Third, the Government must bring forward, as a matter of urgency, legislation for the abolition of the no fault possession procedure which they promised to do when they were elected last year.  Nobody should be forced to give up their home unless there is a really good reason and a hearing where their own side of the story can be heard.

Fourth, the current pause on possessions should be extended until the above legislation is passed and comes into force, and it must be applied to existing tenancies.

Last but not least, all the grounds for possession for rent arrears should be discretionary, so that the court can hear the tenant’s reasons for the arrears, and if they cannot be covered by benefits or any other financial assistance, then they will be able to order them to be paid off over a prolonged period, depending on the amount and the tenant’s own circumstances.


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