Leading foundation calls for government to solve England’s £375m rent arrears crisis

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An independent think-tank has backed calls for the government to introduce tenant hardship loans for renters impacted by the pandemic, revealing that 450,000 families renting in both private and social housing are behind with their payments.

The Resolution Foundation says that while the Universal Credit uplift of £20 a week and Discretionary Housing Payments (DHP) should be maintained, it also needs to focus on the large numbers of people under housing stress who can’t access financial help.

Its report shows that more than half (56%) of private renter families with arrears aren’t claiming benefits – the passport to the DHP system.

It says: “For this group, a tenant loan scheme, along with requirements on landlords to mediate, would go a long way towards an equitable and efficient resolution of the incipient housing cost crisis.”

Rent arrears

In January, 9% of families in the social rented sector were behind with their housing payments along with 6% of those renting privately, according to the foundation.

It estimates that the scheme would cost £375 million to operate in England, although it says: “It is fair to expect some quid pro quo from landlords if the state takes on the risk of non-payment of arrears via a tenant loan scheme.”

The report adds: “The time has come for the government to deliver on its promise of a pre-action protocol for private renters and require landlords to take serious steps to negotiate a payment plan with indebted tenants before proceeding to court.”

The National Residential Landlords Association agrees that simply banning repossessions is doing nothing to address underlying problems.

Meera Chindooroy (pictured), deputy policy director, adds: “The chancellor needs to develop an urgent financial package as called for by the Resolution Foundation to pay off arrears built since lockdown measures started last year. Only this will sustain tenancies and prevent renters facing the consequences of damaged credit scores.”

Visit the Resolution Foundation’s website.

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