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New scheme to help tenants impacted by the pandemic stay in their homes

Fri 14 Aug 2020

Great news for tenants and landlords alike as a new loan scheme for tenants with rent arrears due to coronavirus is launched by the Welsh Government.


The £8m Tenant Saver Loan Scheme is for private sector tenants and it is designed to help both tenants and landlords who have struggled financially as a result of the COVID-19 pandemic.

Tenants will be able to apply for a low-interest loan to cover their arrears, once the loan is accepted, the money will be paid directly to the landlord or agent and tenants will be able to pay back the amount over five years. This move will help tenants sustain their tenancies.

The APR level (Annual Percentage Rate) of interest on the loan will be 1%, Welsh Assembly Ministers have said, and there will be no maximum amount but the scheme will cover rent arrears only.

The scheme will be managed by the Wales Council for Voluntary Action and be delivered via credit unions.

It’s worth noting it will not apply to those who were in significant rental arrears before March - when lockdown began.

Martine Harris, Head of Lettings at Moginie James has said that this is good news for both tenants and landlords alike and hopefully these loans will help keep tenants who have been affected by coronavirus in their homes, while supporting landlords who are reliant on rental income to pay their own bills.

"I 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," she adds.

What you need to know about Tenancy Saver Loan Scheme

  • What is the Tenancy Saver Loan scheme? - This is a loan scheme for tenants who are in rent arrears, or in danger of getting into rent arrears. Tenants can apply for a loan to cover these arrears, and the loan will be paid directly to their landlord or agent. 
  • Why is the Welsh Government introducing the scheme? - We are introducing the scheme because tenants – many of whom don’t have access to housing benefits - have seen a drop in their income due to Covid-19 and that has affected their ability to pay their rent. 
  • When will the scheme begin? - We are aiming to begin the scheme in September. 
  • How much can tenants borrow? - There is no limit on what a tenant can borrow, but the loan repayments will need to be affordable, and the amount can only cover any arrears built up since 1 March. 
  • Why is this not a loan for landlords? - We considered this, but providing a loan to a landlord does not necessarily remove the threat of eviction from a tenant. A tenant would still be in rent arrears to a landlord. 
  • Who is the money paid to? The tenant or landlord/agent? - The landlord or agent. The loan is purely for rent arrears, or for future periods which a tenant may struggle to pay their rent. Paying directly to the landlord or agent will provide assurance that rent arrears will be covered, and will remove the threat of eviction for rent arrears. 
  • Who will deliver the scheme? - We are currently looking at our options in terms of delivery partners. It will need to be providers who are able to provide loans, and offer a level of additional support to tenants. 
  • Can’t a landlord just evict a tenant anyway after receiving the loan? - The payment will mean you won’t be able to evict someone for serious rent arrears. 
  • What happens if a tenant can’t repay the loan? - We would expect the loan provider to be sympathetic to the situation that a tenant may be in, and to only apply formal recovery of the outstanding loan once all other options and offers of support have been exhausted. The landlord will not be affected by any debt the tenant may owe to the provider. 
  • How can tenants apply for the scheme? - Through a range of routes. They could be referred though our Early Alert scheme or through their local authority. They could also approach the scheme provider directly. 
  • How can I find out more? - Further details about the scheme will be available in forthcoming RSW bulletins and Moginie James will post regular updates on our blog.
  • What happens if a tenant is unable to pay? - The Welsh Government said an initial affordability assessment will consider whether the tenant will be able to pay back the loan long term, but if someone does fall behind on payments it might be possible that credit unions will recover the debt.
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