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Covid Arrears - More should still be done to clear them

This week’s Budget saw the Chancellor loosen the Treasury’s purse strings in a number of areas. 

Yet this was a quiet Autumn Budget for private landlords compared with previous years, as post-pandemic measures relating to business rates, air passenger duty fuel duty and taxes on alcohol were front and centre of the Chancellor’s plans. A mooted rise in Capital Gains Tax did not materialise. 

That is not to say it was an unhelpful Budget in respect of tax. In its Economic and Fiscal Outlook, the independent Office for Budget Responsibility observed that any moves to increase Capital Gains Tax, or the stamp duty surcharge on the purchase of additional homes would provide little return for the Treasury. Likewise, the deadline to report and pay Capital Gains Tax after selling residential property will increase from 30 days after the completion date to 60 days.


 One announcement that will likely have a positive impact on the private rented sector (PRS) will be the cut in the Universal Credit taper rate from 63 per cent to 55 per cent. According to the Government’s own figures, these changes represent an effective tax cut for low income working households in receipt of Universal Credit worth £2.2 billion in 2022-23.

This cut will help tenants in work and in receipt of Universal Credit to keep a little more of their entitlement ahead of what will likely be a difficult winter for many across the UK, making it easier to meet rent payments. This in turn will help landlords to sustain tenancies over the medium and long term.

But however welcome it is, the announcement doesn’t address the widespread damage caused by the Treasury’s decision to freeze local housing allowance in cash terms. Having a system whereby assistance with housing costs is not tracking market rents is, as the Institute for Fiscal Studies has noted, “arbitrary and unfair.”

Moreover, the Budget did nothing to support those who are unemployed and in receipt of Universal Credit, and certainly doesn’t mitigate the negative impact which will be caused by the recent £20 a week cut to UC payments across the board.


A likely consequence is that many more tenants in receipt of benefits will fall into further rent arrears, putting at risk their credit scores to the extent that they will struggle to access housing in the future. As a result, the ongoing rent debt crisis will magnify in 2022. These are debts which landlords cannot afford to sustain. 

The rising prospect of a spike in homelessness this winter also cast a shadow over the Budget. We welcome the announcement of £65m for local authorities to help address the rent arrears of vulnerable tenants. This is financial support which we have long been calling for and we strongly encourage tenants in difficulty to contact their councils to access this support.  But the funds on offer simply aren’t on the scale necessary to solve this crisis. Our figures put COVID-related rent debts at over £300 million. 

What is needed are more fundamental changes to deal with the shortcomings of the Universal Credit system, as well as the rent arrears debt mountain. The system needs to give the confidence and security that tenants and landlords seek that rent payments can be met.

Ending the five-week waiting period for a first Universal Credit payment would be a good start, ensuring tenants are not left waiting for vital support to be paid. It should also be easier for tenants to arrange for the housing element of this payment to go directly to landlords, giving them the certainty that rent payments are covered. 

Both of these steps would go a long way towards the development of a private rented sector which is fair and inclusive for both landlords and tenants. We call on the Government to deliver these vital changes. 

You can read more of the NRLA’s Budget response here

*Meera Chindooroy is Deputy Policy Director of the National Residential Landlords Association 

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    If UC claimants can't afford their current rent, they should move to a cheaper property or in with family and friends until they have settled all outstanding debts.

    UC claimants in work can now keep more of their earnings so can begin to repay arrears. UC claimants not in work don't need to stay in a specific area so can move to somewhere affordable and be appreciative of the support they continue to enjoy from the hard pressed tax payer.


    When I could no longer afford the petrol for the Rolls I bought a Fiat 500

  • Theodor Cable

    Love that, and so true.
    Well put Robert.

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    On a different note I think all protesters should be Registered and licensed, pay £1’100.00 Application fee like the LL’s that they are protesting about, its not fair that licensed Regulated Landlords are being bullied interfered with and obstructed while running a legitimate Business by unlicensed, un- Registered bone idle tugs that have all this free time to mess about.

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    It is nice to see that the NRLA is beginning to recognise there is a problem with benefit tenants but they are 90% of course if they believe the government should be making it " easier for tenants to arrange for housing element to go directly to the landlord" though this is not a bad thing to ask for. My experience is that the tenants I come across have no intention of paying the landlord knowing full well it will take months to evict them and they can often get rehoused by the council. Yes , I know there is a declared policy that Councils will not rehouse those who have intentionally made themselves homeless by not paying their rent but my experience is they still do get rehouse by the council or by social landlords.

    The emphasis should be on changing the insane policy of paying the rent direct to tenants. Is a mad experiment which has not worked.

    I operate HMOs in the West Midlands and had over 1000 tenants. It is not my experience that the unemployed cannot afford the rent, it is paid for them, but too many tenants prefer to keep the rent or sometimes bizarrely refused to claim for the rent.

    I am an unusual landlord in that I have a policy that I will not evict a tenant who is unable to pay the rent only those who wilfully refuse to pay their rent and in 30 years I have never come across a tenant who has been unable to pay their rent it is always that they deliberately decide not to pay or cooperate in getting the rent paid for them and there is a lot to fall into this bracket, nearly always the unemployed. Too many tenants who claim benefits keep the rent element for no other reason than they can.

    If the government wanted to teach unemployed tenants financial responsibility they would record which tenants get evicted for not paying their rent and deduct from their benefit their arrears to repay their previous landlord and not allow the rent element of their benefit to be paid to them until they had repaid their previous landlord. Currently such tenants can go from landlord to landlord and in effect often more than double their benefit by keeping the rent element. When paid so much why would they ever want to work? The government has created a body of unemployed renters who work the system.

    I cannot understand why the NRLA and the government do not get that the policy of paying the rent to the unemployed instead of paying it to the landlord is making the housing of the unemployed unviable. Why does the government have a scheme for paying the rent for the unemployed only to sabotage it by paying the rent to the tenants? The government say that if the tenant does not pay then they will be "safeguarded " which means the rent will be paid directly to the landlord if they request it. Unfortunately the safeguarding procedure though welcomed results in over two months rent being lost, extra administration for the landlord and can easily be circumvented by streetwise tenants intent on ensuring the landlord is not paid.

    Jim Haliburton
    The HMO Daddy

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    Anyone must know that by paying money to the person its not owed to, it’s very unlikely it’s going to get to the person that’s owed. Its a deliberate action by Council to give the Tenant the opportunity to steal,
    in other words the Councils don’t want the LL to get paid.


    Put another way councils don't want us to take tenants on benefits, well that's fine because I no longer do mainly because past experience has shown me that most do keep the housing benefit for themselves

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    I have heard a Council say they want Tenants to learn how to manage their money, it must be to learn to manager LL’s for themselves
    How can anyone be so ridiculous, they are highly educated able to use Computers, Laptops and iPhones it like something to tell a 7 year old.

  • Theodor Cable

    Benefit tenants?
    You MUST be joking?

    Never, never and never........


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