To ask Her Majesty’s Government what further financial support they are considering to help private sector residential tenants clear rent arrears accrued since the introduction of restrictions to address the COVID-19 pandemic.
I declare my residential and commercial property interests as set out in the register. The Government have provided an unprecedented £352 billion support package, keeping millions in work and temporarily bolstering the welfare safety net by more than £1,000 a year for families most in need. Financial support from private rented sector tenants remains in place. The job retention scheme and universal credit uplift are available until the end of September. For renters who require additional support, £140 million of discretionary housing payments are available.
I thank the Minister for his response, but the recent housing resilience survey suggested that the proportion of private renters in arrears increased from 3% in 2019 to 9% in 2020. Will the Minister accept that allowing arrears to grow in this way is not sustainable for tenants or landlords? The Budget announced a pilot no-interest loan scheme to help vulnerable consumers who would benefit from affordable short-term credit to meet unexpected costs. Will the Minister consider a similar loan scheme to support tenants who are now in arrears but do not claim benefit support?
My Lords, I point out that two-thirds of the tenants identified in the survey have two months or less of rent arrears. We have preferred to avoid encouraging further debt, instead providing non-repayable financial support through furlough and the welfare system.
My Lords, in the debate in Grand Committee on 22 April on poverty and mass evictions I asked my noble friend whether his department would do a quick review of the schemes in Wales and Scotland of grants and loans that prevent evictions to see whether any lessons might be learned for England. He replied:
“I will encourage my officials to look at what we can learn from the devolved Administrations”.—[Official Report, 22/4/21; col. GC 402.]
My noble friend is quite right. I have asked my department to do that. My officials carefully studied the Scottish and Welsh schemes to support tenants with rent arrears. I understand that a relatively small number of loans have been made by these schemes. Indeed, the Government continue to believe that it is right to provide non-repayable financial support rather than encouraging further debt.
My Lords, I declare my housing interests as on the register. Has the noble Lord’s ministry been able to study the outcomes of the tenant loan scheme operating in Spain? Has this enabled tenants to pay off Covid-related arrears successfully and avoid the traumas and cost of widespread evictions? If the scheme is working well in Spain, why not here?
My Lords, we continue to review other examples of support, including that in Spain, as well as those in the devolved Administrations in the United Kingdom. We will consider what impact they might have, but we will continue with the policy we have about not encouraging further debt.
My Lords, I refer the House to my interests as set out in the register. Right now, an estimated 353,000 private renters are in arrears. Rent arrears have doubled since the beginning of the Covid-19 pandemic. The Government promised that no renter would lose their home due to the pandemic. Is it not time for the Government to accept the need for a Covid rent debt fund to clear Covid arrears for the most financially destitute renters, who are at severe risk of homelessness? If not, with the ban on evictions that has been in place during lockdown being lifted next month, how will the Government stop evictions because of Covid rent debt?
My Lords, we are aware of the exhortations from many organisations, but we consider that the increase in rent arrears is not statistically significant between the two surveys. It went from 7% to 9%. We also recognise that we have provided a substantial package of support for renters during the pandemic, including legislative protections and unprecedented financial support.
Does the Minister accept that loosening restrictions when 353,000 private renters are in arrears risks making families homeless, particularly while no-fault evictions are still in use? Even at this late stage, will he agree to meet Generation Rent to discuss a Covid rent debt fund, enabling renters to clear their debts and landlords to claim up to 80% of income lost, all at a fraction of the current subsidies for home owners?
My Lords, I am always very happy to meet Generation Rent and hear its proposals. I point out that we continue to provide support even at this stage. We lifted the local housing allowance rates to the 30th percentile of local rents in April 2020. That has provided 1.5 million claimants with around £500 more housing support per year. We have announced that local housing rates will be maintained at the increased level in cash terms in 2021-22.
My Lords, financial assistance to renters finds its way straight into the pockets of landlords, but rents have fallen during the pandemic, not least in London. Does my noble friend agree that any scheme designed for this purpose should ensure that landlords do not receive returns greater than they would have received in market circumstances?
My noble friend is right that we have seen rents reduce as a result of the pandemic. All the schemes that we have designed cover rent at the level presented by the landlord. Obviously, schemes that we have provided to support renters will reduce as a consequence of reducing rents.
My Lords, although the excellent furlough scheme has helped to reduce some financial suffering during the pandemic, the reduced incomes of individuals and households have led to increased arrears for many tenants. If we are to avoid the hardships of a rise in homelessness with the ban on evictions due to end this summer, will the Minister consider loans to be used exclusively to clear rent arrears, as has been mentioned by many speakers?
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Rent Arrears: Covid-19 · Order Paper · Order Paper