Landlords are Struggling in a Covid Climate

ARLA is calling upon the government to implement a support package to help keep the private rental sector afloat. It says if the government doesn’t do something soon, many landlords will have no choice but to launch eviction proceedings against tenants.

“[In September], our Private Rented Sector Report showed an increase in the number of landlords selling their buy-to-let properties and the figures are the highest we have on record for the month of September,” says ARLA in its HM Treasury submission.

“The nature of the coronavirus crisis requires a one-off intervention to address specifically Covid-19 related arrears. This will enable both tenants and landlords to continue the tenancy and support tenants to remain in their homes.”

Generation Rent Says Tenants are Falling Into Arrears

Research carried out by Generation Rent last November revealed that 500k tenants were struggling to pay their rent after losing their job. Universal Credit very often fails to cover the rent and tenants are left with a significant shortfall. The Department of Work and Pensions has been inundated with applications for Universal Credit, which has led to a backlog of cases. 

The data shows that 46% of tenants in some areas are relying on benefits. In cities like London where low-paid jobs in retail and hospitality have been decimated, the number of benefits applications has doubled.

Smaller Landlords Can’t Access Government Support

The number of tenants in debt is having a knock-on effect on landlords, many of whom rely on their rental income to pay a mortgage. Smaller landlords in particular are struggling, with only incorporated landlords able to access business bounce back loans and other financial support measures. 

The problem is being confounded by the closure of the DWP’s UC Landlord Portal. The system was only set up last year to help social landlords to make managed rent payment requests online rather than sending an email. It was designed as a mechanism to pay housing benefits directly to a landlord if a tenant was having difficulties paying rent.

DWP Landlord Portal Closed to new Applications

Due to an unprecedented number of claims, the DWP has suspended the portal where landlords can set up Alternative Payment Arrangements.

Sherrelle Collman from Caridon Landlord Solutions says the situation is desperate:

“The pressure that DWP must be under due to the rise in claimants is enormous, but when tenants are struggling to meet their rent payments, we know that APAs not only have a significant impact on limiting arrears; they also help to sustain the tenancy.”

Landlord Action Says Landlords Will be Forced to Evict Tenants

Landlord Action is also concerned about the problems faced by landlords in these unprecedented times.

“Universal Credit faces heavy criticism from landlords and tenants at the best of times,” says Paul Shamplina.

“If landlords are now confronted with yet another barrier to access direct payments, it is inevitable that many more landlords will be encouraged to serve notice on those tenants in receipt of Universal Credit, which goes against the government’s intentions.”