Aug

HM Treasury’s Debt Repayment Plans a ‘threat to landlords’ say experts

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Landlords face a new challenge next year when the Government introduces its Statutory Debt Repayment Plan scheme, experts have warned.

During Covid HM Treasury introduces a ‘breathing space’ scheme to give those in serious debt up to 60 days before legal action began, including rent arrears.

Now, following a consultation that ended last week, HM Treasury expects to bring in Statutory Debt Repayment Plans.

These would enable a certified debt advisor to develop a repayment plan that would provide reassurances that debts would be paid, in return for legal protections for the debtor.

But the contentious issue for landlords will be whether the plans will include rent arrears.

While ‘breathing space’ arrangements automatically included qualifying debt including rent arrears, debtors can choose to exclude or include them within their SDRP.

Tenancy renewals

This is because, HM Treasury says, “the likely longer period over which rent arrears will be paid in the plan could lead to a landlord not renewing an individual’s tenancy”.

Nevertheless, trade association Propertymark is worried rent arrears will be rolled into SDRPs, counselling HM Treasury that they should only be included as a ‘last resort’.

Proprtymark is worried that landlords could fall into mortgage arrears if they were unable to take possession proceedings in respect of arrears included in a plan.

“The development of a SDRP should be made in conversation with the tenant, agent, landlord and debt advisor,” it says.

“This would ensure the frequency and amount of payment is in the best interests of all parties involved.”

Timothy Douglas (pictured), its Head of Policy and Campaigns, adds: “During these difficult times, it is essential that we find ways to support tenants who temporarily cannot afford to pay off debts including rent while ensuring the solutions cannot be abused by those who have no intention of paying.”

Read the consultation in full.

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