Asked by
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.
(CB) [V]
My Lords, in begging leave to ask the Question standing in my
name on the Order Paper, I declare my interests as set out in the
register.
The Minister of State, Home Office and Ministry of Housing,
Communities and Local Government () (Con)
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.
(CB) [V]
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?
(Con)
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.
(Con)
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.]
What was the outcome of that review?
(Con)
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.
(CB) [V]
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?
(Con)
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.
(Lab Co-op)
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?
(Con)
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.
(LD)
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?
(Con)
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.
(Con)
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
normal market circumstances?
(Con)
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.
(CB)
[V]
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?
(Con)
My Lords, I restate the Government’s position that we are not
looking to encourage further debt. I also point to the statistics
regarding homelessness. We have seen a 40% decrease in
homelessness duty owed in the period between October 2020 and the
same period in 2019. We are not seeing that massive spike in
homelessness that has been alluded to.
(GP) [V]
My Lords, before the pandemic it was taking a median of 42 weeks
for court cases to reach repossession. The mean length was nearer
a year. Analysis suggests that the small number that are being
processed now are taking nearly twice as long. The courts cannot
cope with the likely flood, and the delays will greatly increase
the stress, suffering and uncertainty for private tenants, and
difficulty for landlords. Does the Minister agree that the
pile-up of repossession cases in the courts is another argument
for a grant scheme, ideally, or at least a loan scheme to rescue
people from unpayable arrears, provide certainty and prevent
delays?
(Con)
My Lords, I am not aware of a pile-up in the courts. Indeed, we
have actually seen a massive drop in the number of repossession
cases. It decreased to 262 repossessions in January to March
2021—a reduction of some 96%—and 214 local authorities had no
landlord repossessions at all.
(LD) [V]
Given that the number of tenants in arrears on low incomes who
have been impacted by Covid has more than doubled, have the
Government conducted an impact assessment of the change to allow
evictions once more? If so, will they make that available to
Members of the House?
(Con)
My Lords, we continue to survey this very carefully indeed. As I
pointed out, although we have seen an increase, according to the
survey, in the number of renters in arrears, the vast majority of
them—some two-thirds—have arrears of no greater than two months.
(Con)
[V]
My Lords, I declare my interests as in the register. Can the
Minister comment on what plans the Government have to assist
small and medium landlords who are unable to recover
Covid-related rent arrears and face potential enforcement action
by their mortgage providers? Might the Government persuade
mortgage providers to extend their overall repayment period in
these cases, instead of seeking to enforce the mortgage?
(Con)
My noble friend will be pleased to know that, to support
landlords, mortgage lenders have agreed to offer payment holidays
of up to six months, including for buy-to-let mortgages. Although
that is available only until July 2021, from 1 April 2021 there
have been moves to enable forbearance options tailored to the
individual landlord.
