NRLA warns of looming referencing crisis as Covid arrears taint credit scores

Thousands of tenants in rent arrears will struggle to find future homes because of damaged credit scores caused by legal action, according to the National Residential Landlords Association (NRLA).

Ahead of emergency restrictions easing on 1st June, its new survey of more than 2,000 private renters in England and Wales shows that 7% have built up arrears since the first lockdown in March 2020.

A quarter of them report that their landlord has attempted to reclaim these by seeking a court order which, if successful, damage a tenant’s credit score and make it harder to access new housing.

Difficulties

With the government refusing to support tenants and landlords in tackling COVID-related arrears, the research finds that about 210,000 tenants may face severe difficulties in getting landlords to let to them in future. 

The data, compiled by research consultancy Dynata, finds that the average amount of rent owed during the pandemic is now almost £900.

The figures also show that more than 80% of renters now in arrears weren’t behind on their rent payments when the pandemic began, while 30% of them now owe £1,000 or more. Most don’t qualify for emergency housing support from councils to help those receiving benefits.

furlough

Ben Beadle, NRLA chief executive, says that without urgent help, many tenants face the prospect of losing their home needlessly as landlords struggle to shoulder the cost of arrears.

He adds: “The government needs to develop a financial package which ensures that benefits cover the rents of those in receipt of them. For those who do not qualify for benefit support, an interest-free, government guaranteed tenant hardship loan should be established, similar to those in Wales and Scotland.”

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