A new £8 million Welsh Government Tenancy Saver Loan scheme to help tenants struggling with rent arrears due to coronavirus has been announced by Minister for Housing and Local Government Julie James.
First of its kind in the UK, the 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 March 31st 2021.
Paid directly to landlords or agents, the scheme will offer 1% APR loans to be repaid over a period of up to 5 years and will 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, the loans will be provided by seven Credit Unions across Wales.
The Credit Unions will firstly 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, then the Credit Unions will provide them with support for the duration of the loan repayment term.
Minister for Housing and Local Government, 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.” 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."
Rebecca Woolley, Director, 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."
* 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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