Safeagent is calling for an overhaul of Discretionary Housing Payments (DHPs).

The accreditation scheme for lettings and management agents argues that enhancing these payments, which can be made to tenants, would be the most effective way to support those who are in arrears as a result of the pandemic.

Currently, tenants can only be ‘passported’ to DHPs by being on Universal Credit (UC) or its predecessor, housing benefit. While some claimants are out of work, research shows that around 40% of UC claimants in England are currently in employment.

A modified DHP scheme could, therefore, help a wide range of renters who may have arrears now, or might be impacted in the future by the coming UC reduction and National Insurance increases, according to safeagent.

The not-for-profit organisation argues that it could also provide tailored support to those on UC who are seeking work – and even be widened in scope to embrace those who fall outside of UC altogether.

As it stands, the distribution of DHP funding amongst Local Authorities varies hugely, as does local policy on the utilisation of DHPs to prevent homelessness.

Safeagent wants an end to  what it describes as ‘the current lottery of how tenants struggling to pay their rent are supported’, by revising the existing DHP scheme to create a centralised system, which would then distribute money evenly and fairly to Local Authorities, enabling them to offer support for tenants at a local level where they know it is needed most.

The report protecting the homeless and the private rented sector: MHCLG’s response to Covid-19 echoed safeagent’s call, agreeing that DHPs should be the “preferred option” for delivery of help to tenants in COVID-related arrears.

While some parts of the sector have called for the introduction of a Tenancy Hardship Loan Scheme for England, safeagent does not believe this is a sustainable option for renters who are in arrears now. Safeagent says that this view is backed by recent FOI requests to the Scottish and Welsh governments, which show poor take up of loans in Scotland and Wales.

As of 3 August 2021, 159 Tenancy Hardship Loans had been approved for private tenants in Scotland, compared to 47 Tenancy Saver Loans in Wales. This equates to 206 loans for a combined Scottish and Welsh PRS of around 536,000 properties.

Isobel Thomson, safeagent chief executive, said: “Currently it’s a lottery whether a tenant will meet the criteria to access support, with too much red tape to wade through.

“Although the picture on arrears remains unclear with varying reports on the levels of rent outstanding to landlords, with furlough ending, the £20 a week cut to Universal Credit and the Local Housing Allowance freeze, there could be higher demand for arrears support in the coming months. Those who are just about managing need to know there is a more effective system of support should they need to access it.

“An enhanced DHP system could have a key role to play in helping people as they find work and clear debts to stay in their homes. If Government is serious about supporting tenants there must be an easy to access system for those in need. Rather than creating a new tenant hardship loan scheme, surely modifying DHPs is a more cost effective way forward?”