The Welsh government’s Tenancy Saver Loans, allowing renters facing financial hardship to apply for low-interest loans to cover their rental arrears built during the Covid -19 pandemic, has been officially launched.

The scheme, which will apply to the Private Rented Sector only, will allow tenants to borrow money to cover the rent owed, with the cash then paid directly to the landlord or agent.

As yet there is no cap on the amount that can be borrowed and the tenant will be given up to five years to repay the loan at 1% APR.

Applications will stay open until 31 March 2021 but will not be open to those who had substantial arrears of more than two months’ rent before 1 March 2020.

The 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.”

Tenants can apply by contacting Credit Unions directly or completing an online enquiry form –creditunionsofwales.co.uk/tsl/.

Tenants can also be referred through the Welsh Government Early Alert scheme for rent arrears and other PRS debt which is being delivered by Citizens Advice Cymru.

Claire Savage, policy officer for Credit Unions, commented: “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 UK government is being urged to follow the example set in Wales, as well as in Scotland, by developing a similar low-interest, guaranteed hardship loans to help tenants in England pay off rent arrears built as a consequence of the current pandemic.

Research by YouGov for the National Residential Landlords Association found that private landlords with properties in England may have collectively lost up to £437m in lost rental income as a result of Covid-19.

According to the study, almost a fifth of landlords had lost up to half of their usual rental income.

Chris Norris, policy director for the National Residential Landlords Association (NRLA), commented: “Our research still shows that private landlords across England have faced rental loses of up to £437m as a result of Covid-19.

“It is vital that the government now follows the example set in Wales and Scotland and develops interest free, government guaranteed hardship loans to help tenants pay off rent arrears built as a result of the pandemic.

“We cannot expect them, or landlords, the vast majority of whom are individuals without the means to absorb significant losses, to continue to struggle without support.”