As people take their cautious steps towards enjoying new freedoms, hundreds of thousands of private renters are faced with the terrifying prospect of homelessness due to Covid rent debt.
The government paused evictions throughout the pandemic, but these protections came to an end on June 1. The eviction ban was necessary and welcome, and prevented thousands of households from facing homelessness at the height of a public health crisis. But the eviction ban was not a long-term solution. While evictions were paused, hundreds of thousands of renters slipped through the gaps in support schemes and built up debt. The number of private rented households claiming universal credit doubled and government figures show that rent arrears tripled in a year, up to nine per cent of all households. That represents almost 500,000 households facing mounting debt, owing an average of over £700.And with evictions once again being processed, these households could face losing their home.
Without government action, the rent debt crisis could soon become a homelessness crisis
For now, renters who have got behind on payments have been largely protected. Others report landlords coming to a repayment plan for a short period of time. But with the courts now open, tenants who are in arrears are vulnerable to eviction. While some will be able to find a new place to live, those on lower incomes or claiming universal credit could struggle to find a new home. Universal credit currently only covers the lowest third of market rents, discrimination against benefit claimants remains common and renters in arrears may struggle to find a new home. These barriers to moving, combined with the end of the eviction ban and upcoming end to the furlough scheme in September have left housing campaigners and homelessness charities warning that, without government action, the rent debt crisis could soon become a homelessness crisis. Generation Rent has warned that homelessness could triple as a result of the pandemic.
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A rise in homelessness is not inevitable. The government must act now to end the rent debt crisis and ensure that no one loses their home as a result of the pandemic. Generation Rent is calling on the government to suspend evictions for rent arrears to ensure that renters who have lost income due to the pandemic do not also lose their home. We also need action to ensure the benefits system covers housing costs through restoring the housing element of universal credit, Local Housing Allowance (LHA), to the average rent, removing benefit caps, expanding eligibility, and scrapping no recourse to public funds. The last year has seen huge increases in the number of people claiming universal credit and has highlighted that, for many, it is simply not enough to live in. Alongside this, we’re calling on the government to clear the debt already built up during the crisis though making £288m of support available through a new Covid Rent Debt Fund to cover lost income.
It’s difficult not to feel that renters have been overlooked by the government
Of course, this scheme costs money, at a time when government is attempting to scale back the unprecedented levels of public spending seen over the last year. Generation Rent’s Covid Rent Debt Fund would cost the Treasury around £288m. That figure may seem high but, given that the chancellor gave away the equivalent of £1.6bn to homeowners through the extension of the stamp duty holiday, it’s difficult not to feel that renters have been overlooked by the government. Investing now to fix the rent debt crisis would save the government money in future, through saving local councils millions in homelessness services.