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Around 840,000 tenants who have fallen into arrears are in danger of losing their homes as a result of the pandemic, according to data from the National Residential Landlords Association.

The landlord’s body says that seven per cent of private renters have built up arrears since the UK’s series of national lockdowns began last March.

The average arrears were between £251 and £500, though 18 per cent, or approximately 150,000, of those with rental debts owed more than £1,000.

The NRLA says: “These debts are increasing to the point where there is no hope of many being able to afford to pay them back. The outcome will be that most will have to leave their homes as emergency measures taper down from June.”

The body claims that although most landlords have been working with struggling tenants to help keep them in their homes as far as possible, 60 per cent have lost rental income as a result of the pandemic. Of these, 39 per cent said their losses are mounting.

The intervention comes as courts begin to hear possession cases again following a six-month stay on proceedings imposed by the Financial Conduct Authority due to the pandemic.

Courts are hearing the most serious cases such as those related to anti-social behaviour, criminal activity such as fraud, and where arrears were amassed before lockdown measures began.

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However, the NRLA said the justice system is facing “strains” in this area, as they are “hearing the relatively few cases that are being allowed to go ahead”.

The body has called for video links to speed up cases.

It has also renewed its call for a package of hardship loans and grants for affected tenants to pay off arrears built since the beginning of the health crisis, so tenants can stay in their homes and are prevented from facing damaged credit scores.

NLRA chief executive Ben Beadle says: “While many landlords and tenants have worked well in responding to the challenges posed by the pandemic, we are now at a crunch point. As the country follows the roadmap out of lockdown, so too emergency measures in the rental market will need to be eased.

Beadle adds: “Ministers need to ensure the tenants have the financial means to pay off rent debts built as a result of the pandemic. Without this, they will have to accept the inevitable consequence of rising homelessness and damaged credit scores.”

Repossession claims by private landlords in the final three months of last year fell by 37 per cent compared to the same period in 2019, according to Ministry of Justice data released last month.

However, the Ministry of Justice statistician said these early figures, which cover England and Wales, should be treated with “caution”.

The statistician adds: “While these statistics are of interest to the public, it is worth noting that the small volumes of repossession actions mean that the data is unlikely to be representative of general trends in possessions. Caution should therefore be used when interpreting and applying these figures.”

By Roger Baird

Source: Mortgage Strategy

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