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The COVID-19 pandemic has had a devastating impact on economies and societies around the world, and the UK has not been spared. One of the most pressing issues facing the country today is the rent arrear crisis. With many people losing their jobs or seeing their income reduced due to the pandemic, a growing number of tenants are struggling to keep up with their rent payments. In this blog post, we will explore the impact of the rent arrear crisis in the UK and examine some potential solutions.
The Scale of the Problem: According to a recent study by the National Residential Landlords Association (NRLA), nearly 840,000 tenants in the UK are in rent arrears, with an average debt of £730. This represents a significant increase from pre-pandemic levels, with the number of tenants in arrears rising by 22% since March 2020. The NRLA also found that 7% of landlords have already been forced to take legal action against tenants in arrears, with a further 11% considering doing so.
The Impact on Tenants: For tenants, the rent arrear crisis can have a devastating impact on their lives. Those in arrears face the risk of eviction, which can lead to homelessness and a range of other problems. Even for those who are not evicted, the stress and anxiety of being in debt can take a toll on their mental health. Many tenants are also forced to cut back on other essentials, such as food and heating, in order to meet their rent payments.
The Impact on Landlords: The rent arrear crisis also has a significant impact on landlords. For those who rely on rental income to make ends meet, tenants in arrears can cause serious financial difficulties. Landlords may struggle to pay their own bills or even face bankruptcy. In addition, the legal process of evicting tenants in arrears can be expensive and time-consuming, further exacerbating the problem.
Potential Solutions: So what can be done to address the rent arrear crisis in the UK? One potential solution is for the government to provide financial support to tenants who are struggling to pay their rent. This could take the form of direct payments or loans, or it could involve expanding existing support schemes such as Universal Credit.
A longer term solution is for the Government to build more affordable housing, whether built-to-rent or social housing, giving those who are unable to afford high rent payments in the private sector, an opportunity to be housed.
When it comes to landlords and their tenants, it would be ideal for them to work together to find mutually beneficial solutions, such as negotiating reduced rent payments or agreeing to a repayment plan.
Alongside many other benefits, one of the biggest benefits of Guaranteed Rent is that landlords won't have to suffer from rent arrears as we guarantee that rent will be paid every month - even if the property is empty. Learn more about Guaranteed Rent for your property today.