The Scottish Government’s £10 million tenant hardship loan fund is due to open for applications on 7 December 2020 and its online portal, which provides details of the fund, is now live. https://tenanthardshiploan.est.org.uk/
This fund will offer loans to tenants both private rented and social sectors who are struggling with rent because of changes to their finances and / or employment during the pandemic. Loans will be interest free and repayments will be deferred for 6 months following payment of the loan, with the loan being repaid in 60 monthly instalments. The loan can be fully repaid at any point.
The loan is only available to clear rent arrears that have accrued since 01 January 2020 and/or can be used to pay a maximum of 3 future months’ rent payments. Only a maximum of 9 months in total can be applied for and only one application will be permitted.
Applicants will need to pass an affordability check and a credit check before being offered a loan and to confirm the level of any arrears, the loan administrators (Energy Savings Trust on behalf of Scottish Government) will contact the landlords, or where applicable the landlords letting agent, of the applicants for verification of the current circumstances. This will include the amount of monthly rent due, the level of outstanding rent arrears and confirmation that these arrears where accumulated after January 2020.
To avoid delays in offering the loan to eligible tenants, landlords and letting agents are asked to provide the requested information as quickly as possible.
In addition to this information, private landlords will also be required to sign an agreement preventing them from taking action to repossess a property on the grounds of:
- rent arrears,
- the landlord or their family member intend to live in the let property,
- the landlord intends to sell the let property,
- the landlord intends to use the let property for a purpose other than housing,
during any period where rent payments are covered by the loan. Any formal action to end a tenancy on these grounds that has already been started will also need to be withdrawn.
Tenants should seek to access the most appropriate form of financial support and the loan may not always be the best option for people who are facing difficulty. The loan is repayable and many tenants may be entitled to non-repayable support, for example through Universal Credit and Discretionary Housing Payments, which may be a much better option.
Applicants will be sign-posted to organisations that can provide advice (Shelter Scotland, Citizens Advice Scotland, Money Talks teams, local authority advisors etc). These organisations will not be able to advise on the loan itself or the appropriateness of a loan for individual tenants. They will, however, be able to help inform applicants of any other support that might be available.
The application form will include a declaration that the applicant has investigated and applied for other forms of support where these are available. Specific questions on whether advice has been sought will be included in the application form.
We will continue to keep you informed of any issues affecting the private rented sector.