Tenant Saver Loan Scheme Launched

13th October 2020

Following our earlier news post, Seraph Property Management is pleased to announce that the Tenancy Saver Loan scheme for the Private Rented Sector (PRS) has now launched. This is something our director, Douglas Haig has been lobbying for as part of the NRLA and is a positive step to landlords’ concerns being heard and addressed with the Welsh Government. We understand the pressures tenants are facing and with the furlough scheme shortly coming to an end, this type of support is welcomed in the private rented sector for both tenants and landlords.

Here we help answer your most frequently asked questions regarding the new scheme.

What is the Tenancy Saver Loan Scheme?

This is a dedicated scheme for tenants who have been affected by Covid-19 in regards to paying rent. The loan is available at 1% APR interest which is to be repaid up to 5 years from the start date of the loan. The loan is paid directly to the landlord or the agent upon successful application.

Why has the Welsh Government introduced the scheme?

This scheme is to support tenants struggling to pay their rent due to the impact of Covid-19. The tenant saver loan has been created to help tenants stay in their homes, without facing eviction whilst also ensuring the landlord is receiving the rent owed to them.

What does the loan cover?

Whilst the loan is paid directly to the landlord or agent, the loan must only be used to pay off any arrears or contribute to future rent payments only. This cannot be linked to other improvements for the property. The loan is received directly by the landlord or agent, in order to remove the threat of evicting the tenant.

When does the scheme start and what period does it cover?

The scheme has launched from the 7th October 2020, applications are being accepted until the 31st March 2021 and the loan itself can be backdated for rent payments from 1st March 2020.

Who delivers the scheme?

Managing the scheme will be the Wales Council for Voluntary Action, in conjunction with participating Credit Unions across Wales. The Credit Unions are the loan providers and support the loan applicant throughout the term of the scheme. They are an alternative to pay-day loans and are protected by the Financial Services Compensation Scheme.

Claire Savage, policy officer for Credit Unions, commented:

“Seven credit unions will be providing the Tenancy Saver Loans across Wales, working with the 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.”

What are the eligibility criteria for the Tenant Saver Loan Scheme?

• Must be renting a home located in Wales
• Must be renting via the Private Rented Sector (not Social Housing)
• There must be a tenancy agreement between the tenant and landlord/agent.
• The applicant should not have been in rent arrears at least 8 weeks prior to the 1st March 2020.
• The applicant must be in arrears from 1st March 2020 and will struggle to pay future rent (up to 3 months in advance) as a result of Covid-19.
• The applicant is not in receipt of housing benefit or universal credit.
• The landlord/agent must be registered/licensed with Rent Smart Wales
• The applicant’s affordability assessment shows the applicant can afford to pay back the loan.
• The applicant has not applied and received a tenancy saver loan through another provider.

How much can be borrowed?

The loan is assessed on the tenant’s affordability and repayment over a period of 5 years. Applicants are able to borrow the full amount of rent arrears owed or based on future rental payments provided it can be repaid. A tenant can only apply for one loan but will be evaluated on a case by case basis.

What rent arrears are covered by the scheme?

The loan can be for any tenants who have been struggling to pay rent since 1st March 2020 and/or are struggling to pay future rent. This could be because of a change of employment circumstance due to Covid-19, such as those coming off furlough, zero-hours contracts, those who are shielding or need to self-isolate.

How is the loan money paid?

The money is transferred to the landlord or agent on behalf of the tenant. The tenant will need to provide the landlord or the agent details and then the Credit Union will contact the landlord/agent to verify this and obtain bank details for the transfer.

How do tenants apply for the loan?

Tenants should contact their landlord/agent to let them know the tenant saver loan is being applied for (especially as Credit Unions will need to speak to them). Further information about the scheme is available on the Credit Unions of Wales website. This includes an online enquiry form and contact details for each of the participating Credit Unions.

As a landlord, can the Tenancy Saver Loan Scheme be enforced?

No. The Tenancy Saver Loan scheme is voluntary and will involve the tenant opting to apply for a loan. If a tenant does not want to take the loan or does not pass affordability, you can advise that they contact the Citizens Advice Cymru Private Rented Sector helpline, where advisers provide a free, confidential, independent service to advise tenants on ways in which they can maximise their income and manage debt – with a view to helping them pay their rent so they can remain in their homes.

An eviction notice has already been served on a tenant for rent arrears, are they still able to access the Tenancy Saver Loan?

Tenants are still eligible for the scheme even if they have been served an eviction notice, however, the Welsh Government would strongly recommend removing the notice if the loan means rent arrears are cleared. If a notice was served for rent arrears then it is likely the notice would become invalid once the loan has been paid.

What is Seraph doing in connection to the Tenant Saver Loan Scheme?

We are taking a proactive approach and are speaking to those tenants with the most serious rent arrears first and then to anyone who may be struggling to pay their rent, to make them aware of this scheme. As we have been communicating often with our tenants, we are aware of those who have been impacted by Covid-19 through employment issues or shielding. Whilst we are making all tenants and landlords aware of the scheme, this is a voluntary scheme and therefore we will work with any tenant and supporting Credit Union that contacts us. The rent will then be paid to the landlord upon receipt of this loan. We will equally be working with landlords to help recover any rent and ensure future rent payments moving forward for those who have tenants impacted by Covid-19.

Please see below other useful resources:

• For further information about which Credit Unions are providing loans click here: https://creditunionsofwales.co.uk/ 
• For the latest Housing Advice in relation to Covid-19, it’s here: https://gov.wales/coronavirus-housing-advice
• Details about the Tenancy Saver Loan scheme are also available on the Covid-19 information page on the Rent Smart Wales website here: https://www.rentsmart.gov.wales/en/covid19info/
• Citizens Advice Cymru Private Rented Sector helpline can be contacted on 0300 330 2177  for free, confidential, independent service for tenants.

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