Southwark rent help from repossession prevention loan fund

The Southwark repossession prevention fund provides very low interest rate loans to tenants for paying rent arrears they may have on their flat. In some cases, the scheme will provide money to homeowners and the homeless for their housing costs as well, such as a mortgage or damage deposit on a new home. The aim of the loan is to prevent homelessness in the district, and up to £5,000 is paid out to each client from the fund.

The local authorities partner with the Southwark Credit Union on the administration of the repossession prevention fund. The council will screen the applicants and assess whether they are eligible for a loan or not. There are criteria that are taking into consideration, such as whether the applicant has an income, a chronic history of evictions, or whether they are in arrears on their council tax. A full interview will take place.

At most, £5,000 will be paid out. The loan is for people with a temporary emergency, such as a medical issue or short term reduction in income. It can help the tenant pay their rent while they work through the crisis. The authorities in Southwark will also allow the money to be used for other housing related bills, such as fuel costs or heating bills. Any expense that if not paid could cause an eviction can be covered by the fund.

A key criteria is the applicant needs to be facing a short term hardship. Their income needs to recover in a short period of time so they can afford to pay their bills on their own in the future, without this safety net programme. The terms of the funds provided by the Southwark Credit Union will clearly state this.

Loans from the repossession prevention fund will come with a payment plan that may last anywhere from 6 to 18 months. The interest rate will be very low, though the exact APR will depend on the borrowers’s income and financial situation. In any case the interest will be much lower than a payday loan that some Southwark residents have felt the need to turn to.

When an application is approved, the client will need to open an account with the credit union. The money will be transferred to their account. When the resident withdraws the cash, it will be issued in the form of a voucher that is only approved for expenses authorised by the Southwark Council. The money comes with restrictions on housing costs, such as rent, utility bills or a mortgage payment. If a client tries to use the loan to pay for other expenses then it will be denied and the agreement may be canceled.

When applying for help, an appointment needs to be made with the Southwark Housing Options team. The phone number is 020 7525 5950. As noted ,both tenants that are in arrears on their rent as well as homeowners threatened with a repossession can apply. Applicants should bring proof of their income and savings. The loans are also only for people over the age of 18 that are local to Southwark.