New Scheme to Help Tenants in Wales Repay Rental Arrears

The Welsh Government has launched a new scheme to help tenants in financial difficulty, due to the pandemic, repay rental arrears to their landlords and maintain their tenancy. Buy to let consultant, Erin Gallacher, explains how it works and how tenants and landlords can apply.

Thousands have been financially impacted by the pandemic, whether they’ve been furloughed or made redundant. For this reason, making the monthly rent payments has inevitably become difficult for many in private rental accommodation. While this mounting debt is understandably challenging for the tenant, missed payments also put financial stress on the landlord. Designed to help both tenants and buy to let landlords, the new loan scheme from the Welsh Government offers renters a low interest (1% APR) loan which is paid straight to their landlord.

Applications are now open and will close on 31st March 2021. There are several essential eligibility checks which tenants must meet to qualify for the loan. The scheme’s criteria require that the applicant:

  • is a Private Rental Sector (PRS) tenant and holds a tenancy for a home located in Wales
  • was not in significant rent arrears (over two months’ rent) before 1st March 2020
  • at point of application, will struggle to pay future rent (up to three months in advance) as a result of COVID-19
  • does not receive either housing benefits or housing cost payments through Universal Credit
  • has a landlord and/or agent that is registered and/or licensed with Rent Smart Wales
  • can afford to repay the loan, based on their income and affordability assessment
  • had not applied and received a Tenancy Saver Loan through another provider for the period in question

Tenants can apply for the loan themselves through Credit Unions, or they can be referred by their landlord, letting agent, friends and family or local authority via the Welsh Government Early Alert scheme for rent arrears.

The deadline for the UK Government’s original Mortgage Payment Holiday applications is the 31st October 2020; however, as the work retention scheme comes to an end, many are only now being thrown into financial difficulty. This new incentive for tenants in Wales could offer landlords an additional financial safety net against COVID-19 related arrears, which will be a comfort for many over the next few months.

Source: Nationals Residential Landlord Association (NRLA)

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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