Landlords in England with tenants in rent arrears because of Covid are to be helped via a new £65m debt fund.

Although announced today by the newly-renamed Department for Levelling Up, Housing and Communities – which will provide the £65m – the scheme is to be operated by local authorities.

They will have the choice of how to administer the funding within the overall proviso that any money will be paid directly to the landlord or agent, or to a new landlord if the household is trying to find a new home.

Industry bodies including the NRLA and ARLA Propertymark have been calling for such a scheme for some months.

Housing minister Eddie Hughes says: “We have taken action throughout the pandemic to support the most vulnerable families, and it is vital we continue to provide support as we enter the winter months.

“This new funding will support families that are struggling and help to get them back on their feet as we begin to recover from the Covid-19 pandemic.”

Today’s announcement says the government is “grateful” to landlords for their support during the pandemic. 

Around 3.8m households on low incomes are in arrears with household bill including rent, according to the Joseph Rowntree Foundation. Some 950,000 are thought to be in rent arrears, 1.4m are behind on council tax bills and 1.4m are behind on electricity and gas bills, the foundation claims.

The scheme has been welcomed by Chris Norris of the National Residential Landlords Association.

He says: “It is great news that those households worst hit by Covid related arrears may be able to access financial support. 

“However, £65m does not fully reflect the scale of the problem. NRLA analysis has put the figure of Covid rent debts at over £300m.

“With warnings that rent debts could pose a risk to the economic recovery and the Government admitting that many landlords are highly vulnerable to arrears the Chancellor must go further.”

Lord John Bird, founder of The Big Issue, says: “I am very pleased to hear the government has listened to our call to keep people in their homes and stop mass homelessness.

“It is vital that they are taking preventative action to ensure people will not be left homeless this winter.

“The end of furlough and the lift of the eviction ban have posed a very grave danger to everyday families and individuals who are struggling to make ends meet as a result of Covid-19 poverty.

“This is certainly a welcome announcement, however there is £360m in rent arrears in the UK currently, so far greater action will be needed to stop a catastrophic rise in homelessness.”