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.
While the government has suspended all eviction cases in the courts until August 24, there is no protection beyond this point for renters who are in arrears.
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.
Baroness Kennedy: too many holes in welfare system
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.”
To see the policy paper setting out Generation Rent’s proposals, click here.
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“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”.
“The government has already intervened to stop … mortgage-holders from losing their homes. They need to give the same protections to renters who still face losing their homes”.
This is la la land, as there has been no similar intervention to stop mortgage holders losing their homes.
Banks have been prevailed upon to give mortgage holidays – yet the debt is just added on to the existing loan, repayments increased and addtional interest accrued accordingly.
So far so good, and better off than renters who are reliant on the landlord’s discretion until August 24th.
However, while repossessions have been suspended until October 31st, when the mortgage payment holidays end and the redundancies kick in, there is nothing within the Government ‘intervention’ to prevent them thereafter.
It’s just a breather.
At best she might argue for an eviction moratorium until October 31st, otherwise she’s demanding parity for renters against protections for mortgagees that don’t exist.
Unless she’s going to suggest that the Government pick up 80% of mortgage arrears as well?
As if that’s going to happen.