More than 800,000 private tenants in England and Wales could be behind on their rent, with young people and the self-employed most likely to have missed payments, research for a private landlords group has found.
The National Residential Landlords Association is warning of a “rent debt crisis” and has called for swift and effective action from the Government to help struggling tenants. This stark warning is backed up by figures from the advisory group Citizens Advice who estimate that at least 500,000 private tenants are behind on their rent payments with an estimated £360 million owed to their landlords.
A survey for the NRLA found 7 per cent of renters had built up arrears as a result of the Covid-19 pandemic, a figure that equates to 840,000 people across England and Wales. The average arrears were between £251 and £500, but some tenants reported they owed their landlord more than £1,000.
Renters aged between 18 and 24 were twice as likely to have fallen behind as the general population of tenants, and the self-employed were most likely to be struggling, with 17 per cent saying they had built up debts to their landlord.
The NRLA also found that 56 per cent of landlords lost rental income as a result of the pandemic, with 12 per cent having lost more than 20 per cent of their rental income. 22 per cent lost more than £5,000 and 59 per cent had lost more than £1,000, with 36 per cent saying the losses are continuing to increase.
Homeowners and landlords have been able to ask for payment holidays, but tenants have had to negotiate with property owners on an individual basis. Some landlords have been flexible over payments, and some have reduced rents for struggling tenants, but they have not been obliged to take any action.
Citizens Advice says that it helped someone every two minutes in December with an issue to do with their private tenancy. It added the average amount of rent owed by tenants is £730 and one in four private renters in arrears have been threatened with eviction or cancellation of contract by their landlord.
Ben Beadle, Chief Executive of the NRLA, said:
“Our research highlights in stark terms the rent debt crisis now engulfing the rental market. The vast majority of landlords have done everything possible to support tenants affected due to Covid-19, but expecting them to muddle through without further support is hurting tenants as well as landlords.”
He added:
“Ministers need to accept that simply banning repossessions does nothing to keep tenants in their homes long-term. In fact, it will achieve the complete opposite as in kicking the can down the road it just means larger debts pile up, creating a bigger problem for tenants and for landlords. To sustain tenancies, the Government needs to provide an urgent financial package to get rent debts paid off.”
Citizens Advice made a similar call for targeted financial support for people in England with rent arrears. It says the Government should consider a system of grants and Government-backed loans, comparable to schemes in Scotland and Wales, to help tenants pay back their rent arrears sustainably and stay in their homes.
By Patrick Mooney, Editor