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Loans to tenants NOT the answer to arrears, survey suggests

A survey of private rental sector clients by accreditation body safeagent suggests 44 per cent feel government-backed loans for tenants to pay off arrears would make matters worse. 

This is despite calls for such loans from a number of trade bodies, who want England to follow Wales where such loans are now available.

Only 38 per cent of safeagent firms feel such loans are a solution. 


And even those in favour say loans introduced in England should be carefully managed, with the significant majority saying they should go directly to the landlord or agent.

However, letting agents who responded to the survey felt that landlord clients may be more likely to back the loan idea, as it would provide a short-term means of arrears being paid off.

On the subject of arrears, safeagent’s survey suggests that although they are currently higher than the usual three to five per cent of normal times, there is no sign yet of a huge debt mountain created by the Coronavirus. 

safeagent says 21 per cent of respondents report arrears amongst 10 to 20 per cent of tenants, while seven per cent say there are no arrears at all. 

Of those tenants owing their landlords, most were only one or two months behind. 

When asked what route landlords would pursue as a result of arrears, agents commented that eviction was always a last resort. 



Payment plans were by far the most popular alternative option at 86 per cent. Potential eviction was 37 per cent and mediation was 26 per cent; one in five say landlords may sell property. 

safeagent chief executive Isobel Thomson says: “safeagent has real concerns about tenant loans, and we share many of our agents' worries that they might only serve to add to debt and cause further arrears in the future. We believe mediation and payment plans are a more effective solution for all parties.”

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  • Mohammad Kamran  Iqbal

    Government backed loans for tenants paid directly to agent/landlord to clear their rent arrears is best solution for all parties.

  • Mark Wilson

    Payments plans will equal in many cases a Landlords dream that he wont have to write off rent as a bad debt, and mediation to do what? We are still in furlough, just wait a few weeks and the real implications of what has and is happening will start to unfold. A lot of people don't have any money!


    If people don't have the money to pay their rents then they should either borrow the money or vacate the property. A government loan scheme doesn't cause extra debt. The tenants have already incurred the debt in rent arrears. A government loan actually prevents the debt escalating with statutory interest, court fees etc. avoided.

    Why would anyone who claims to be on the side of tenants be against them getting loans to avoid eviction and greater debt?

    Mark Wilson

    I am on no ones side. I just see for what it is.


    I thought that- because without government help where required, no one wins.

    I'm on the side of both decent landlords and decent tenants. A government loan could provide a solution to both.

    Decent tenants don't deserve eviction but landlords can't and shouldn't be expected to put up with any non paying tenants, whether normally decent people who want to meet their obligations or feckless rent dodgers.

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    • 19 October 2020 09:08 AM

    This just proves what idiots safeagent is.

    LL don't care where the money comes from to pay rent arrears.
    LL don't want mediation.
    They just want the rent from whoever.

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    • 19 October 2020 09:22 AM

    Unfortunately society has deemed it perfectly acceptable to be a feckless tenant.

    The PRS is the only business where fecklessness is actively supported by the State
    LL are really up against it!

    It is obvious LL will become very cautious who they let to when they know the State is there ready to actively support any feckless tenant.

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    In one way I think this experiment could be a good thing. The Government will be made to understand what landlords face every day. It might engender a reality check. On the other hand flying pigs are forming up into squadrons.

  • Andrew McCausland

    I would be very interested to see the data supporting safeagent's statement as it flies in the face of everything coming from virtually every other source (except Shelter and Generation Rent of course). Landlords need rental income to pay their bills and will have to evict tenants who cannot or will not pay. The current system of LL essentially operating a free housing system on behalf of the government is not tenable.

    Some tenants will be able to enter a payment arrangement but many more will take years to pay this off, is they ever do so. If government want LL to continue housing tenants when the eviction ban ends then then need to support them to do so.

    The obvious answer, with respect to safeagent, is a loan to the tenant but paid to the LL. Without this the courts will be swamped with eviction cases, a vast number of tenants will have CCJ's that will restrict recovery as it reduces their future economic activity and many LL will also face economic hardship - hardship forced on them by the government's demand they house tenants for free for extended periods.

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    If they do end up giving tenants loans (paid direct to landlord to make sure we get it and then taken off their UC money weekly until it's repaid!) what guarantee do we have that they won't claw it back the same as UC paid direct if it turns out they've claimed benefits fraudulently and weren't entitled to it? Or will they put a clause in that says if the tenant doesn't pay it back we'll be liable - I wouldn't put it past any government to do this!

    Then what happens to those who have tenants who won't claim the loan because they know if investigated their claim might be refused - how does the landlord get his rent then?

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    • 20 October 2020 16:29 PM

    Good points.....VERY good.

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    where's my violin ?



    You really must hate tenants otherwise you wouldn't mock those who genuinely want to keep them in homes and want to limit the risks of having to evict those who want to meet their legal obligations but find circumstances preventing them from so doing.

    I pity you for your pathetic attempts to belittle decent landlords and tenants.

    • 20 October 2020 23:24 PM

    Seb presumably you have no qualms about making millions of tenants homeless.

    If it wasn't for the eviction ban there would be hundreds of thousands of homeless tenants.

    Only the Govt and dysfunctional eviction process has saved...........temporarily these feckless rent defaulting tenants.
    I don't think tenants would thank you at all for your attitude

    You should be awre that once this immediate crisis is over many LL will be considering their position.

    This would be very bad news for tenants who desperately need LL to remain.
    If they don't you'll need a whole orchestra of violins for those now homeless tenants!.


    Robert and Paul - you two are funny people... you want us all to believe that I am mocking tenants while your every other response, as decent well-respected LLs on this forum, is a cry of "EVICTION for the worthless scum" ?

    Only in your little world...

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    The government will have more sense than to get involved in recovering loan rent debt and evictions. The same for councils. Far simpler to drop that mess on landlords and ignore reality.
    The best thing for the government to do is to stick with section 21 and make it very efficient. This will keep the PRS in good order and in all probability lighten the load on councils by applying some monetary discipline which many tenants will of course resent.

    • 20 October 2020 23:40 PM

    Indeed but to stop the likes of Shelter etc continually and incorrectly stating that S21 is a non-fault NTQ then S21 should only be allowed to be used for rent defaulting.

    All other reasons for eviction to be resolved by an enhanced S8 process.

    That should shut Shelter up.

    But a revised S21 process should be sped up so that the day after the notice period has expired LL should be able to remove rent defaulting tenants with Police assistance if necessary.

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    As Paul says keep sec 21 for a fast track way of evicting non payers, that's all I've ever used it for, then no one can call it a no fault eviction, problem solved.


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