Activists demand Covid Rent Debt Fund to wipe out 100% of arrears

The Generation Rent campaign wants public cash in a Covid Rent Debt Fund to clear rent arrears for tenants who have run up Coronavirus-related debts.

Baroness Alicia Kennedy, director of the campaign, says: “The government’s measures to increase support through the benefits system have failed to prevent half a million households racking up rent arrears, which will be impossible to pay back even when the economy recovers. 

“While most are not at immediate risk of eviction, they are still being forced to pay the price of the pandemic and face the prospect of homelessness without further action. To get these people back on their feet, we need Rishi Sunak to step in and clear these arrears with a Covid Rent Debt Fund.”

Baroness Kennedy - now a cross-bencher but until June last year a Labour member of the House of Lords - made her remarks ahead of a Lords debate on the current ban on bailiff-enforced evictions. 

She argues that government action has failed to address the underlying £360m of rent arrears which is putting homes at risk.

Generation Rent now wants Chancellor Rishi Sunak to use next month’s Budget to clear rent arrears and provide £288m to allow landlords to claim 80 per cent of the rent due.

In the House of Lords yesterday Labour’s Lord Kennedy and Liberal Democrat Baroness Grender tabled “motions of regret” criticising the ban on bailiff-led evictions, claiming it also reduced the arrears threshold.

They said that meant tenants with more than six months’ arrears were still vulnerable to eviction, and highlighted the financial challenges facing renters.

Generation Rent says that in August 2020, 36 per cent more private renters were relying on Local Housing Allowance to pay their rent than in February 2020: the campaign also estimates that 538,000 private renter households in England are not receiving enough in LHA to cover their rent.

A statement from the campaign says: “As well as being grounds for eviction, rent arrears can also lead to a County Court Judgment which makes it more difficult to find a new home, and damage your credit score which can make it difficult to apply for mobile phone contract or credit card in future.”

It adds that under its proposed Covid Rent Debt Fund, “the government would clear renters’ arrears, keeping them in their homes, while allowing landlords to apply for compensation up to 80 per cent of the original monthly rent.”

The statement also says that while the idea of simply cancelling rent has raised concerns about landlords’ property rights, “legal experts have backed Generation Rent’s proposal as a proportionate way of dealing with debt that balances the interests of landlords and tenants.”

It does not name the legal experts in question.

We're excited to announce that we're working on building a shiny new website for readers of Landlord Today! As part of this process, commenting on articles will be temporarily disabled. We look forward to sharing our new and improved Landlord Today website with you shortly!