The Coronavirus pandemic has had a huge impact on everyone’s life, and for some tenants and landlords, it has caused a lot of financial concerns. Many renters lost their jobs or were placed on furlough with a reduced income and were unable to meet their rent payments every month.
This obviously had a knock-on effect on landlords, who have been left in a difficult position with tenants unable to pay. The Government have provided a lot of support over the last two years to help those struggling financially through the pandemic.
Earlier this year, the Department for Levelling Up, Housing, and Communities (DLUHC) announced a new £65 million support package for vulnerable renters. In this article, we are looking at what this support package includes and what it means for landlords this winter.
£65 Million Covid Arrears Funding
The new support package is aimed to help renters who have fallen into arrears because of the pandemic, and in turn, this will help landlords at the same time. Although the scheme has been announced by the DLUHC, it will actually be operated by the local councils.
Each local authority will be given the freedom to choose how to administer the support in their area. The overall idea is that the money will be paid directly to letting agents or landlords to help cover rent arrears.
Many industry experts have been calling on the Government for months to provide some kind of support to landlords and tenants facing difficult times. This latest support package is in addition to the £500 million funding announced back in September to support those struggling with essential bills such as food and energy.
Despite the positive news that funding is being provided for those in arrears, many are concerned that this money is not enough to help everyone who is struggling.
An estimated 3.8 million households are struggling with household bills and on a low income in the UK. Roughly 950,000 of these are also thought to be behind on their rent payments, and 1.4 million are struggling to pay their council tax. These are all those in the lowest 40% of incomes in the country, which is those with £24,752 or less.
This suggests that 33% of renters with a low income are currently in arrears, which is three times higher than pre-pandemic estimates.
What Does This Mean For Landlords?
Local councils are operating the new scheme to support any low-income households who are in rent arrears. Each council is responsible for deciding the best way to support each renter on a case by case basis. Payments will be provided directly to landlords or letting agents instead of being given to the tenants themselves.
Renters struggling with their payments should contact their local authorities for help and advice. Landlords are not able to claim for help or payments directly but can support their tenants in seeking help from local councils.
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