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Welsh Government launches loan scheme for struggling renters

A new loan scheme for private tenants struggling with rent arrears because of Covid-19 launches in Wales today (October 7).

Billed as the first of its kind in the UK, the £8 million Welsh Government Tenancy Saver Loan scheme will be open to private rented sector tenants in rent arrears and those who may also struggle to pay future months’ rent as a result of coronavirus. It will be open until the end of March 2021.

Paid directly to landlords or agents, the scheme will offer 1% APR loans to be repaid over a period of up to five years and is designed to provide an affordable way to cover rent arrears, or future months’ rent, reducing the risk of eviction and homelessness. Once a tenant has applied for the loan they will be able to access support and advice services to help them manage their financial situation.

Managed by Wales Council for Voluntary Action (WCVA), the loans will be provided by seven credit unions across Wales.

The credit unions will work with tenants to find out whether they’re eligible for the loan scheme and how much they could afford to repay. If the scheme is suitable for the tenant, they will provide them with support for the duration of the loan repayment term.

Housing minister Julie James said:

‘We recognise the constant pressure that the coronavirus is putting on tenants and landlords. While we have already taken steps to alleviate some of this pressure, such as extending the temporary six-month notice period for eviction and funding Citizens Advice Cymru to deliver the Early Alert Scheme for rent arrears and other household debt for tenants, we want to go one step further. That’s why we’re supporting a low interest loan scheme that provides financial assistance for both tenants and their landlords.

‘The Tenancy Saver Loan Scheme will directly support tenants who are struggling with their rent due to coronavirus to stay in their homes, address their debt and avoid eviction, whilst ensuring landlords receive the rent they are owed.We are committed to ensuring no-one is made homeless as a result of the pandemic and this scheme is part of our long term strategy to help people manage their debt, prevent homelessness and where it cannot be prevented ensure it is rare, brief and non-recurrent.’

Policy officer for Credit Unions of Wales Claire Savage said:

‘Seven credit unions will be providing the Tenancy Saver Loans across Wales, working with Welsh Government and the WCVA to provide a financial lifeline to those who have fallen into rent arrears due to the Covid-19 pandemic and are not able to get other forms of support.

‘The loans are offered at a very low interest rate of just 1% APR and will be subject to the usual affordability checks to ensure that we are helping private sector tenants keep their homes while not building up unsustainable debt.’

Applicants can contact Credit Unions directly or enquire at creditunionsofwales.co.uk/tsl/. Further support and advice can be found on the Welsh Government’s Coronavirus Housing Advice pages at gov.wales/coronavirus-housing-advice.

The launch of the new scheme comes as the Welsh Government begins the next phase of its housing advice digital campaign – focusing on renters who are struggling to pay their rent, at threat of eviction or at risk of redundancy.

Manager of Cambrian Credit Union Ann Francis, which is covering the majority of counties in Wales, said:

‘Credit unions work closely with our communities and have already been approached by both tenants in the private sector and their landlords following the initial announcement about this scheme by the minister for housing and local government.

‘We would stress that this is a loan scheme of last resort and not a grant, so it may be that not every applicant will receive a loan, but credit unions will be making referrals to appropriate bodies to ensure that private tenants are signposted to the help they need.’

Rebecca Woolley, director of Citizens Advice Wales, said:

‘We know that the Coronavirus crisis has caused financial difficulties for families across Wales, and we’re pleased that the Welsh Government has recognised the importance of providing a package of support specifically for renters in the private sector to ensure that the pandemic doesn’t force families from their homes.

‘Any private sector tenant worried about paying their rent can contact Citizens Advice Cymru’s Private Rented Sector helpline for impartial and confidential advice on 0300 330 2177.’

The loan scheme has been welcomed by landlords and housing groups.

Following the announcement, National Residential Landlords Association chief executive Ben Beadle said:

‘We have called for a tenant loan scheme throughout the pandemic are delighted the Welsh Government has implemented a scheme to help both landlords and tenants”

‘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.’

Chief executive of Shelter Cymru, Ruth Power said:”

‘The Covid-19 crisis has created unprecedented stress and hardship for people privately renting across Wales. We welcome any additional steps by the Welsh Government to reduce the risk of private tenants becoming homeless.  While it will not be suitable for everyone, for some people facing a period of financial difficulty the scheme has the potential to offer much needed financial respite, which may prevent homelessness. We are committed to working with the Welsh Government and partners to minimise the impact of Covid on tenants’ lives.

‘Regardless of circumstances, any private tenant at threat of losing their home can contact Shelter Cymru free and in confidence on 08000 495 495.’

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