UK Housing Organisations Team Up to Offer Rent Arrears Support

Author: Rent Guarantor

13/07/2020

A number of UK housing organisations have come together to provide support for landlords and tenants who are experiencing rent arrears problems during the Covid-19 pandemic. The National Residential Landlords Association (NRLA), the Chartered Institute of Housing, The Property Redress Scheme, My Deposits, the Tenancy Deposit Scheme and ARLA Propertymark recently issued a joint statement to launch new guidance for the industry and give much-needed support.

While the economy has begun to re-open, many industries are continuing to experience closures, job cuts or a reduction in working hours and earnings. This means many people across the UK are still earning less than they did preciously, making it more difficult to keep on top of essential bills, including rent. The groups have come together and produced a document full of guidance and support to encourage landlords and tenants to find the best way to move forward when rent arrears arise.

How Many Households are in Arrears?

The reason the six bodies have come together to produce guidance on managing rent arrears during the Covid-19 pandemic, is due to the large number of tenants and landlords affected. 

According to data from letting agent service provider PayProp, the proportion of tenants who were in arrears as at the end of May 2019 was 15.6%, more than double the 6% in May 2019. In addition, the average proportion of rent owed per tenant in 2020 was 124%, compared with 87% in May 2019.

This highlights that even though some 90% of private rental sector rental (PRS) tenants are able to pay their rent as usual, for the 10% who can’t, the level of arrears is mounting fast. That’s why this new guidance has been produced, to help the number of people who are experiencing rent arrears for the first time.  

Working Together and Communication are Key

“COVID-19 has posed significant challenges for both tenants and landlords. As a group, we are committed to doing everything possible to sustain tenancies both through and beyond this period of crisis,” the six bodies said in a joint statement. “The guidance being launched today has an important role to play in achieving this and we encourage all tenants and landlords to work through it together in a spirit of positive co-operation.”

The guidance begins with a four-step plan which is discussed in more detail throughout the document. Those four steps promoted in the guidance are:

  • Don’t ignore the situation. Get in contact and work together.
  • Make sure you have all the additional financial support you need from new options that have become available.
  • Arrange a payment plan both parties agree to.
  • Keep in contact and stick with the agreed arrangements.

While making the first move to contact your landlord or tenant to discuss the situation might feel difficult, particularly if this your first experience of rent arrears, it’s the most important step to make. Where tenants feel nervous about getting in touch with landlords to explain they can’t pay the rent, it might help to know that a recent survey from the National  Residential Landlords Association (NRLA) shows that 90% of landlords who were contacted by tenants affected financially by coronavirus, offered financial assistance.

Overall, the research conducted for the guidance found the importance of being pro-active and working together.

“Open and honest communication from both parties is key. This research has found that responsible tenants and landlords remain committed to sustaining tenancies long-term wherever possible. The only way this can be achieved is through dialogue,” said Ben Beadle, chief executive of the NRLA.