01 Dec 2020

Government to open loan fund for tenants struggling to pay rent

Government to open loan fund for tenants struggling to pay rent

Tenants facing hardship due to Covid-19 will soon be able to apply for an interest-free government loan to cover up to nine months of rent.

The Scottish Government has confirmed that its Tenant Hardship Loan Fund will open for applications in the coming days. Click here for full details.

The Tenant Hardship Loan will provide short-term support for tenants who are having difficulty paying rent because of the impacts of COVID-19.

Who can apply?

The interest free loan is available for private and social sector tenants who:

  • Have the right to reside within in the UK
  • Were not in rent arrears prior to 01 January 2020

Tenants can only apply for a loan on one occasion and will not be permitted to make multiple applications.

The loan scheme funding may be used to:

  • clear rent arrears that have arisen since 01 January 2020 and/or;
  • pay a maximum of three months future rent payments.

Tenants can apply for a loan to cover rent payments as per their tenancy agreement for a period of up to nine months in total. However, tenants cannot apply for more than three months of future rent payments.


To confirm the level of any arrears and to also ensure that funds are only used to pay registered landlords, the Energy Saving Trust, which is administering the scheme on behalf of government, will contact the landlords of the applicants to for verification of the current circumstances.

Loan repayments will be deferred for six months following payment of the loan, with the loan being repaid in 60 monthly instalments. The loan can be fully repaid at any point.

Applicants will need to pass an affordability check and a credit check before being offered a loan.

The loan may not be suitable for all tenants and where a tenant is eligible for other forms of non-repayable support - for example Discretionary Housing Payment – then they should take these up rather than apply for this loan.

'Good news' for landlords and tenants

Adrian Sangster, National Lettings Director at Aberdein Considine, said: "We welcome the launch of this fund, which on face value should provide support for tenants who have struggled with rent arrears as a result of COVID.

"Within our own managed portfolio of properties we have worked with both landlords and tenants to ensure rental arrears have been kept to absolute minimum. 

"However I am aware of others who have suffered greatly and this fund, as long as it delivers what it promises, will be bring some welcome relief."

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