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Saturday, July 11, 2020

Evictions could treble due to coronavirus rent debts, activists warn | Coronavirus outbreak

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The number of households made homeless after being evicted for falling behind on the rent could treble if the government does not stop a mounting debt crisis, campaigners are warning.

They are calling for the government to suspend evictions due to rent arrears arising from the pandemic, an increase in the amount of and eligibility for housing benefits, and a scheme to clear arrears not covered by the benefit system that would guarantee 80% of landlords’ incomes.

Recent polling by the Resolution Foundation found 13% of renters said they were behind with payments to their landlords, compared with about 4% before the pandemic, according to figures from the English housing survey.

But the campaign group Generation Rent said if rates of homelessness followed the same trend, 45,000 households could be made homeless after being evicted from a private tenancy for rent arrears, up from about 15,000 in 2019.

All court proceedings for evictions are frozen until 24 August, but renters’ groups have been warning of an avalanche of evictions once the limit expires.

While homeowners – including landlords – have been able to benefit from mortgage holidays negotiated by the government, tenants have been liable for rent throughout the coronavirus lockdown.

While the government has raised housing benefits to cover the cost of the cheapest 30% of properties in a given area, the rate remains lower than before the imposition of austerity policies a decade ago, when it covered 50% of properties.

Several groups are also unable to even benefit from this modest increase in support, including 432,000 private-renter households led by non-UK nationals with no recourse to public funds, and 224,000 households in full-time education. People with more than £16,000 in the bank are also denied rent support and will be forced to run down their savings.

Alicia Kennedy, director of Generation Rent, said: “There is a rent debt crisis and renters are at risk of losing their homes. The government has already intervened to stop businesses from going under, and mortgage holders from losing their homes. They need to give the same protections to renters who still face losing their home or going bankrupt as a result of rent arrears.

“There are too many holes in the welfare system and our package of measures would ensure no renter faces destitution or becomes homeless due to Covid-19.

“But with the economy contracting, the government should not be expected to sustain rent levels set when the economy was strong. That’s why we propose that landlords would only be guaranteed up to 80% of their rent.”

However, the National Residential Landlord Association (NRLA) said that Generation Rent’s analysis wrongly assumed that landlords were doing nothing to support tenants. It presented its own polling that suggested that 90% of tenants had been able to maintain rent payments despite the coronavirus crisis.

Chris Norris, policy director for the NRLA, said: “Households which fall behind with their rent during lockdown should not be made to unnecessarily fear eviction. Rather, landlords and tenants should be encouraged to work together to find alternative solutions wherever possible.

“Our members have told us consistently during this crisis that they are doing all they can to support tenants to stay in their homes. Despite around 30% of landlords facing some level of financial hardship, they have demonstrated that sustaining viable tenancies is in everybody’s interests.

“That said, we do support calls to boost the finances available to tenants who are struggling to pay their rent, especially as the furlough scheme begins to wind down. This should include ensuring that benefits cover the cost of rents.”

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