Will the Chancellor pay out to help out?
Following on from yesterday’s blog about rent arrears, today we hear that the National Residential Landlords Association is lobbying Chancellor Rishi Sunak to include support for landlords in his upcoming spending review. Due to the Covid-19 outbreak there will be no five-year spending review in November. Instead the Chancellor will focus on the year ahead and the NRLA is determined that property owners in the rental sector get a look-in.
Hardship loans are top of the agenda. The Welsh Government has introduced these for tenants whose incomes have been badly affected by the pandemic and the NRLA believes these should be rolled out in England and paid direct to landlords.
The organisation is also calling for:
- Income support for landlords to cover rent arrears should tenants either not be able to access a loan or where they refuse to apply for one;
- Reforms to the welfare system, to give both landlords and tenants confidence that payments will cover their basic housing costs; and
- No move to increase Capital Gains Tax. The NRLA argues that this would be bad for the PRS; effectively freezing the market and making fewer properties available for tenants at a time when more rental homes will be badly needed.
Landlord Today reports that recent research points to almost £450m of losses to landlords as a result of Covid-related rent arrears. But despite this eye-watering sum, landlords have had no access to financial support. Most buy-to-let landlords have one or two properties. They are not big corporate entities and they have no reserves to fall back on. In our experience, many rely on renting out their property for their income and buy-to-let provides pensions for large numbers of owners.
So we agree with the NRLA that landlords should not be left to sink or swim and that they need financial support as much as tenants do. However, if the government can be persuaded to consider introducing a loan system, this must be thought through carefully. Tenants who are already in financial difficulties should not be encouraged to take on unacceptable levels of debt and the timeframe for repayment needs to be both reasonable and flexible. In many cases, as we said yesterday, it may be better for both parties to a tenancy to try and secure a private agreement on rent arrears that suits them both.
Author : Maryanne Bowring
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