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New Government Covid Rent Arrears Fund Welcomed, But May Not Be Enough

Rent Guarantor Nov 03, 2021

Following months of pressure from various bodies representing landlords and tenants, the UK government has provided new funding for local authorities across England to support tenants who have fallen into arrears due to the effects of the Covid-19 pandemic. The £65 million fund will be allocated via local councils to ensure vulnerable people living in rental accommodation will not end up homeless this winter due to financial problems related to the pandemic.

However, while some bodies have praised the government for the move, others say that the fund doesn't go far enough and that a fund of over £300 million is needed to get to grips with the full scale of the problem. Some charities put the total amount of rent arrears at between £300-440 million and state that while this fund will benefit those able to access it, many more will struggle over the coming months and could become homeless despite this announcement.

Government Rental Support Package

Since the beginning of the pandemic, the level of uncertainty wrought by the effects of the coronavirus have been extensive. Among the most problematic were the 2020 lockdowns which resulted in many industries, including hospitality and much of the retail sector, shutting down completely for periods. Then, once they re-opened, footfall was slow as consumer confidence had been badly affected by the pandemic.

This meant that many people working in those industries – and others that couldn’t open or had limits placed on them – were no longer receiving their full wages. This, in turn, meant that some bills could be paid while others couldn’t and as time went on and savings ran out, fewer bills could be paid as people across the UK relied upon furlough or benefits to pay for essentials and little else. 

Many of those people affected the worst live in the rental sector which has seen the level of rent arrears rise sharply. Even with the economy fully re-opened, the landscape isn’t exactly as it was pre-pandemic. While many people have returned to work, contracts have changed and earnings levels aren’t the same but even where they are, rent arrears are difficult to repay when other costs – many of which have risen in recent weeks and months – are also in need of payment.

For those people in England considered ‘vulnerable renters’ the government has created this new fund with local councils able to make assessments of those most in need and make necessary payments to help ensure they can keep their rental homes and not become homeless due to the effects of the pandemic which were put of their control.

The government says of the new funding which has come from the Department of Levelling Up: “the £65 million will be available through the winter months and that households at risk of eviction or homelessness should contact their local council if they require support.”

Divided Opinion

The news has been welcomed by most although some responses have been more positive than others. Shelter’s chief executive gave an upbeat reaction to the announcement.

“With winter approaching, the government is absolutely right to act to keep people safe in their homes and prevent a wave of evictions and homelessness,” Shelter’s Polly Neate said. “For those who can access it, this funding will be a lifeline.”

However, the National Residential Landlords Association (NRLA) which has been campaigning for exactly this type of fund, said that £65 million “doesn’t reflect the scale of the problem.”

“Government data suggests that seven per cent of private sector tenants in England were in arrears in April-May 2021 and NRLA analysis has put the total figure of Covid rent debts at over £300 million,” said NRLA Chief Executive Ben Beadle.

However, even though the current fund won’t be enough to help everyone affected, there will be many households and landlords who benefit from this additional financial support. It also creates a position to build from if it helps show government a more complete view of the problem. That’s something that should be encouraging at the very least.

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