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Tag: arrears

The Debt Respite Scheme: how does it affect tenants & landlords?

Posted on by prateek

Reside General Manager Toby Martin explains the impact of the government’s new debt relief initiative.

May was Mental Health Awareness Month, a very apt time for the government to launch the Debt Respite Scheme, also known as ‘Breathing Space’.

The purpose of the scheme is to provide a temporary period of respite from creditor action to help people in problem debt, for example a tenant in rent arrears, consider their options and engage with professional debt advice.

A Breathing Space moratorium will provide protections to those in problem debt by pausing enforcement action and freezing charges, fees and interest for up to 60 days. It is not a payment holiday and certain debts, including rent, are considered ‘ongoing liabilities’.

“Breathing Space will… encourage more people to seek advice, and when they do, there will be better protections in place to stop further harm and help recovery.”
Phil Andrew, CEO of StepChange Debt Charty

There is also an alternative way into the scheme for people receiving mental health crisis treatment. A mental health crisis moratorium has some stronger protections and lasts as long as a person’s mental health crisis treatment, plus 30 days.

A Breathing Space moratorium can only be accessed once every 12 months, but there is no limit to the number of times that an individual can enter a mental health crisis moratorium.

Anyone looking to start a Breathing Space must first seek advice from a debt service provider who is authorised by the FCA to offer debt counselling or a local authority. They will determine whether the individual qualifies for a Breathing Space and, if so, will contact any creditors to notify them of the moratorium.

Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.

Chancellor Urged To Act On Tenant Debt

Posted on by prateek

A coalition of property and housing organisations, including Reside’s regulatory body ARLA Propertymark, have come together to call on Chancellor Rishi Sunak to help private renters pay off COVID-19 rent arrears and help sustain existing tenancies.

Across the nation, at least half a million private renters are in arrears due to the economic impact of COVID-19. The UK Government’s own research shows that ‘private renters report being hardest hit by the pandemic’.

The joint statement issued by Propertymark, NRLA, The Big Issue Ride Out Recession Alliance, Citizens Advice, Joseph Rowntree Foundation, Crisis, Money Advice Trust, Nationwide Building Society, The Mortgage Works, StepChange Debt Charity and Shelter welcomes many of the measures taken to date, but goes on to say that they do not go far enough to adequately protect renters going forward. Without additional support, more renters will lose their homes in the coming months, with the risk of an increase in homelessness.

In order to sustain tenancies wherever possible, these organisations maintain that these two pledges are required in the forthcoming budget:

1. A targeted financial package to help renters pay off arrears built since lockdown measures started in March 2020. This will help to sustain existing tenancies and keep renters in their homes, whilst also ensuring rental debt does not prevent them from finding homes in the future.

2. A welfare system that provides renters with the security of knowing that they can afford their homes. The pandemic has shown how vital this is to providing security at a time of crisis. The Government increased Universal Credit and Housing Benefit because it recognised that the system was not doing enough to support people in the first place, yet it has chosen to freeze Housing Benefit rates again from April and is considering cutting Universal Credit at the same time. It cannot be right that these measures could be pulled away from renters during continued economic uncertainty.

The Chancellor is being urged to take action now to avoid renters being scarred by debts they have no hope of clearing and a wave of people having to leave their homes in the months to come.

At Reside, we have worked with our tenants to keep levels of rent arrears very low, however we recognise that the end of the Job Retention and Self-Employment Income Support schemes will present fresh challenges. Additional support for tenants will be needed to avoid a dramatic drop-off in income, for those who are currently reliant on the furlough scheme and self-employment support grants.

Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.