Tenants in Wales told to take low-interest government loans to pay off Covid rent debt to avoid eviction

TENANTS in Wales are being told to take out a low-interest government loan to pay off rent arrears built up because of the coronavirus crisis to avoid eviction.

Private renters can apply for the state-backed initiative which will see the money transferred directly to their landlord or agent.

The Tenancy Saver Loans Scheme (TSLS) is aimed at households whose income has dropped because of Covid-19 lockdown restrictions but aren't eligible to apply for housing benefit.

Housing charity Shelter has warned that 322,000 private renters in England and Wales have fallen into arrears since the start of the pandemic.

A temporary eviction ban brought in to protect tenants throughout the crisis ended in September, putting thousands of households at risk of losing their homes.

While the new rules require tenants have at least six month notice of eviction, landlords are losing out putting them at risk of incurring debt.

What to do if you can’t pay your rent

FOR private renters, speak to your landlord as soon as you can.

They may be able to defer your payment, or to allow you to pay a smaller amount – but they don't have to do this.

Social renters should speak to their housing association or local council.

If you've tried speaking to your housing association or landlord and they aren't being sympathetic, contact Shelter for advice and support. They'll be able to guide you about what to do next.

If you're finding it difficult to manage your payments because you're in debt, here are some tips for you to curb it:

Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money

Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs

Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker

Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)

Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them. Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay

Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.

Groups like Citizens Advice, Money Advice Trust or StepChange can also help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.

Research by the National Residential Landlords Association (NRLA) found that landlords are estimated to have lost out on £427million of income throughout the pandemic.

To tackle the issue in Wales, the devolved government is encouraging renters to take advantage of the low-cost loan scheme to avoid eviction and prevent landlords suffering.

There is no limit to how much a tenant can borrow but they will be subject to the usual affordability checks to make sure they are able to repay it.

Renters who are not yet in arrears but can see they won't be able to pay the bill that month can also apply for the help.

Borrowers will be given up to five years to repay the loan at a rate of 1% APR, which is much cheaper than a personal loan.

For example, the best rate on a £1,000 personal loan is 12.3% APR with AIB (NI).

To repay the loan over 24months, you would be charged £125.92 in interest and the monthly repayments would be £46.91.

But with the TSLS, the amount of interest you would pay over the term would only be £10.40 and your monthly repayments would be £42.10.

How to cut the cost of your debt

IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.

Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money

Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs

Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker

Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)

Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them

Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay

Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further

Groups like Citizens Advice and Money Advice Trust can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans

Households who were in substantial arrears of more than two months' rent before March 1 2020 won't be eligible for the loan.

Struggling tenants will have until March 31 2021 to apply for a loans, which are being provided by credit unions in Wales.

Minister for Housing and Local Government in Wales, Julie James said: "The TSLS will directly support tenants who are struggling with their rent due to coronavirus to stay in their homes, address their debt and avoid eviction, whilst ensuring landlords receive the rent they are owed.

"We are committed to ensuring no-one is made homeless as a result of the pandemic and this scheme is part of our long term strategy to help people manage their debt, prevent homelessness and where it cannot be prevented ensure it is rare, brief and non-recurrent."

Tenants in Wales can apply for a loan through the Credit Unions directly or completing an online enquiry form.

They may also be referred to the scheme through the Welsh Government Early Alert scheme which is carried out by Citizens Advice Cymru.

The Scottish government has already announced its own £10million scheme to help renters in arrears. The Tenant Hardship Loan Fund will launch in autumn.

The UK government is being urged to follow Wales' lead and launch a similar loan initiative to help renters in England.

Chris Norris, policy director for the NRLA, said: "It is vital that the government now follows the example set in Wales and Scotland and develops interest free, government guaranteed hardship loans to help tenants pay off rent arrears built as a result of the pandemic.

"We cannot expect them, or landlords, the vast majority of whom are individuals without the means to absorb significant losses, to continue to struggle without support."

 

 

 

 

 

 

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