Industry News Sally Walmsley 08/10/2020

Financial package vital for the survival of the PRS

Calls for a comprehensive financial package for landlords and tenants form the cornerstone of the NRLA’s submission to Government ahead of the publication of its Comprehensive Spending Review.

The association says the Government must develop a package that provides much greater support for landlords and tenants to ensure that rents can be paid in full and on time. 

It wants ministers to follow the lead of Wales and Scotland to develop a system of hardship loans to help tenants cover Covid-19 related arrears in England.

Specifically it is calling for:

  • Interest free, government guaranteed loans for tenants affected by coronavirus. These should be paid directly to landlords and should cover all arrears accumulated since the start of the pandemic  
  • Income support for landlords to cover arrears where affected tenants either refuse to apply for a loan or where loans are not best suited to them

It also wants reforms to the welfare system, to give both landlords and tenants confidence that payments will cover their basic housing costs.

The changes it is calling for would see:

  • The Shared Accommodation Rate suspended for 12 months to sustain tenancies and allow house moves where needed
  • The Local Housing Allowance remain at the 30th percentile (at least) and ideally increase to the 50th. 
  • Fundamental reforms to the way Universal Credit is structured, by paying it monthly in advance rather than arrears

The NRLA has also made it clear that any move to increase Capital Gains Tax would be a mistake on the part of the Government, with research showing this would only serve to freeze the market, making life more difficult for tenants.

The spending review sets out the government’s spending priorities for the next three years. Covid-19 has caused delays, with the full report now expected to be completed and made public before Christmas.

Meera Chindooroy, deputy director for policy and campaigns for the NRLA said: “Landlords are not property tycoons and the vast majority have just one or two properties which they often rely on for at least part of their income or pension.

“All of our research shows that in the vast majority of cases where tenants have struggled financially due to Covid-19 landlords have done everything they can to sustain the tenancies.

“However our latest figures show landlords have lost up to £437m already as a result of Covid-19 and have been unable to access any of the financial support available to other businesses.

“Landlords cannot shoulder these levels of rent arrears indefinitely, nor should they be expected to.

“It is time the Government stepped up to support to the hardworking landlords out there providing the homes to let that this country so desperately needs.”

 To read the full report click here.

Sally Walmsley

Sally Walmsley Magazine and Digital Editor

Sally is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

See all articles by Sally Walmsley