Thursday, October 21, 2021
Real EstateUK

Renters struggling due credit score damage

Renters

Approximately 210,000 tenants may face severe difficulties in getting landlords to let to them in future, according to the NRLA

Thousands of private renters who have built arrears during the pandemic are struggling to find a new home because of damage to their credit scores, according to a new survey.

The research, from the National Residential Landlords Association (NRLA), found that approximately 210,000 tenants may face severe difficulties in getting landlords to let to them in future.

Ahead of emergency restrictions easing in the private rented sector on 1st June, results from the survey show that 7% of renters have built arrears since lockdown began in March 2020.

A quarter of those with arrears said that their landlord had attempted to reclaim these by seeking a court order. Such orders, where successful, damage a tenant’s credit score, which makes it far harder for them to access new housing in the future.

The average amount of rent owed by those in arrears during the pandemic is now nearly £900.

The figures also show that more than 80% of renters now in arrears were not behind on their rent payments when the pandemic began. 30% of those who are presently in arrears now owe £1,000 or more.

The majority of tenants in arrears do not qualify for emergency housing support provided by councils to help those in receipt of benefits. The Government has also frozen housing benefit rates in cash terms, a policy the Institute for Fiscal Studies has branded as arbitrary and unfair.

Ben Beadle, Chief Executive of the NRLA, said: As the private rented sector moves out of lockdown measures, the Chancellor has failed to provide tenants with the support they need. This is especially the case for the majority of those in rent arrears who do not qualify for benefit support.

Without urgent assistance, many tenants face the prospect of losing their home needlessly as landlords struggle to shoulder the cost of arrears. Affected tenants also potentially face the negative impact of damage to their credit scores, he said.

He said the Government needs to develop a financial package which ensures that benefits cover the rents of those in receipt of them. For those who do not qualify for benefit support, an interest free, government guaranteed tenant hardship loan should be established, similar to those in Wales and Scotland.

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