Repayment plans, debt forgiveness, and low-interest rate loans could help to manage the rising number of tenants falling into arrears and prevent a “surge” in evictions and homelessness once emergency Covid-19 supports are phased out, Threshold has said.
The national housing charity warned the number of people falling into rent arrears has doubled during the Covid-19 crisis, mainly due to loss of income, and a “proactive” strategy is required to manage arrears and prevent a rise in evictions.
Threshold CEO John-Mark McCafferty said that a current moratorium on evictions and rent increases should be extended beyond next Monday, July 20, and proposed extending a freeze on rent increases for a further 12 months to stabilise the rental market.
The emergency measures, he said, helped to reduce the number of families experiencing homelessness by 24% between February and May and this “must now be built upon”.
Mr McCafferty said a conversation is needed on how rent arrears can be managed given that emergency measures will end and unemployment rates could rise by up to 13% next year.
Over 80% of arrears cases dealt with by the charity in the first six months of the year involved arrears of between one and four months.
“As over 400,000 people were still in receipt of the Pandemic Unemployment Payment at the start of July 2020, rent arrears accumulated on foot of job losses will be difficult for most to recover from, and impossible for others. We're in this holding position for now but once the moratoriums end and the Pandemic Unemployment Payment is reduced, we will then really begin to see arrears," Mr McCafferty said.
A range of “parachute” measures, such as repayment plans, low-interest rate loans, and debt forgiveness to deal with an increase in rent arrears should be considered, Mr McCafferty said, adding that enhanced supports and better promotion of the rent supplement payment could also help.
“Ideally the moratoriums on evictions and rent increases should be extended into the medium term, but we know that they will end at some point. As a result, we are calling for ‘parachute’ measures, such as formal repayment plans and debt forgiveness schemes, to be implemented to ensure a soft landing for renters once the restrictions are lifted,” Mr McCafferty said.
There are more than 300,000 tenancy agreements registered with the Residential Tenancies Board (RTB), which Threshold said could play a role in managing rent arrears, alongside the Money Advice and Budgeting Service (MABS) and the insolvency service.
The charity, which met with the new Minister for Housing Darragh O'Brien this week, remains hopeful that existing emergency measures will be extended.
“The government’s proactive approach to this issue has worked up to now, and it must be continued to avoid a surge in homelessness occurring once the emergency measures are lifted,” Mr McCafferty said.
“We've made huge gains through very unusual times and very unusual measures to reduce the homelessness figures because radical choices were made. If we start to see that figure creep back up to the 9,000 or 10,000 mark that would be lamentable and we believe it could be avoided through intervention,” he added.
Threshold's freephone helpline number can be contacted on 1800 454 454, Monday to Friday, 9am to 9pm.