Homelessness will triple this year unless the government acts to end the rent debt crisis faced by private renters as a result of the economic shock of coronavirus, the campaign group Generation Rent has warned today.
Generation Rent suggests that rates of rent arrears have risen from 4 per cent before the pandemic to 13 per cent, which could make 45,000 households homeless, costing councils an extra £117million in temporary accommodation and other support.
The increase in arrears is despite the government’s increase to Local Housing Allowance (LHA) to cover 30 per cent of homes.
According to Generation Rent, more than half a million – 592,000 – renters are reporting being behind on rent payments in England, including students, non-UK nationals with no recourse to public funds (NRPF), and people with savings exceeding £16,000 but who can’t access it – as well as those whose rent is higher than the LHA.
To keep renters in their homes and end the rent debt crisis, Generation Rent is calling on the government to:
- Introduce a new Coronavirus Home Retention Scheme, which would clear rent arrears not covered by the welfare system by guaranteeing landlords’ income up to 80 per cent of the rent.
- Suspend evictions for rent arrears arising due to the pandemic, so that renters have certainty that they can stay in their home beyond August 24.
- Raise LHA and remove caps to cover median rents, and expand eligibility for Universal Credit so that people aren’t left destitute or forced to borrow or run down savings to keep a roof over their head.
Generation Rent estimates this fund would require £750million per quarter.
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 homes or going bankrupt as a result of rent arrears.
“There are too many holes in the welfare system. 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 per cent of their rent.”
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