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A Tenant saver loan scheme is to be introduced in Wales to help stop private rented sector tenants falling behind with their rent because of the Coronavirus crisis.
The new scheme, announced this week by Minister for Housing and Local Government Julie James, is part of a £50m commitment to combat homelessness. It has been hailed as a victory for the National Residential Landlords’ Association, which has campaigned for such support.
The £8m loan scheme, said the Welsh Government, will provide an affordable way to cover rent arrears, or future months’ rent, reducing the risk of eviction and of homelessness.
It is hoped the scheme will be up and running by September, when loans will be available to tenants who were not in significant rent arrears prior to 1 March this year. Although it will be up to tenants to apply for loans, the sums borrowed, if approved, will be paid directly to landlords or letting agents.
It is expected there will be no cap on the amount that can be borrowed. Loans will carry interest of 1 per cent APR, with a five-year payback period.
Rather than applying for a loan, tenants already in receipt of benefits should instead apply to their local authority for Discretionary Housing Payments.
‘We are delighted the Welsh Government has listened to what we had to say and consequently adopted our proposals for a tenant loan scheme’, said NRLA chief executive Ben Beadle.
‘These loans will help keep tenants who have been affected by coronavirus in their homes, while supporting landlords reliant on rental income to pay their own bills.
‘We would advise every landlord with a tenant in arrears to make sure they are aware of the new scheme and advise any landlord in receipt of these payments to commit to working with their tenant to maintain the tenancy in the long term’.
ARLA Propertymark pointed out that the Welsh Government is still finalising the details, but said it understands applicants will be required to provide evidence that they can afford the scheme and have the ability to re-pay.
The scheme is to be administered by Wales Council for Voluntary Action and delivered through credit unions, which will conduct necessary checks.
Introduction of the Tenant Saver Loan Scheme is good news and will bring welcome relief for tenants, landlords, and agents, said ARLA Propertymark policy and campaigns manager Timothy Douglas.
‘It is pleasing that the Welsh Government has continued to engage with stakeholders from across the sector and listened to our calls for targeted support to help those in genuine need because of the impact of coronavirus. Since the start of the pandemic, we have encouraged all parties to show flexibility and to work together particularly when it comes to rent payments. The scheme will play an important part in this and help to sustain tenancies and keep the rent flowing’.