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Covid debt putting 150,000 renters at risk of eviction

We warn today that 150,000 private renters are at risk of eviction when restrictions are lifted as a result of mounting covid-related rent costs. Renters are in need of urgent help to avert a crisis of widespread housing insecurity, homelessness and long-term problem debt.

The warning comes as the charity launches its Covid Debt Rescue campaign. The campaign is calling for a package of emergency financial support to help renters keep their homes while their finances recover, in order to prevent widespread homelessness, housing insecurity and long-term problem debt.

Our new polling finds that half of private renters (3.7 million people) have experienced a drop in income since March 2020, while the number who have fallen behind on their rent since the start of the pandemic stands at 460,000. Most worryingly, the report finds 150,000 expect to be evicted in the next twelve months because they can’t afford their rent.

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In total, our research reveals £25bn of arrears and borrowing directly attributable to Covid has been built up since the start of the pandemic, with more than 19 million people (38% of British adults) having faced a loss of income in this period. Meanwhile, the number of people in severe problem debt stands at 1.8 million, up from 1.4 million in September.

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For those renters who find themselves in debt, the further suspension of rental evictions until the end of May is a good start. StepChange is also calling for a further extension to give renters more chance to get back on their feet, however the report finds this alone would not be enough to hold back the rising tide of debt many private renters are battling – one in five expects it to take at least six months until they can even afford all their household bills again.

"We got into rent arrears when my husband was made redundant. We've been doing everything we can to catch up with the missed payments, but our landlord has made it clear that he can get rid of us at any time." Nadia, London

As well as the immediate danger of eviction and the risk of long-term housing insecurity, the research highlights the wider disproportionate effects of the pandemic on renters. Since March 2020, one in five private renters (1.5m people) have had to go without meals or suitable clothes, while three in ten (2m people) say money worries have contributed to anxiety, depression or other mental health problems. Meanwhile almost a million private renters (12%) say money worries have damaged their ability to find work or complete education since March. All three outcomes are more prevalent among private renters than the general public.

"My record was 10 days without a meal. To ensure the kids could eat meals, I ate bread or 11p noodles." StepChange client

The Government said in March 2020 that no-one should lose their home as a result of the pandemic. StepChange agrees, which is why the charity is calling on the Government to provide an emergency support package of grants and no-interest loans for private renters to deal with arrears currently estimated at £370 million. Governments in Wales and Scotland have already made a start on tenancy saver schemes for renters – now the UK Government must roll out an improved version of support in England and provide devolved administrations with the resources needed to fully support renters.

As well as helping renters to keep their homes, financial support to sustain tenancies will help to reduce the long-term cost to public services like housing, health and mental health that would otherwise be inevitable - offsetting some of the annual £8.3bn cost of problem debt to the economy.

StepChange CEO Phil Andrew said:

“The pandemic has taken an enormous financial toll on many households, but renters have been particularly badly hit: they are more likely to work in sectors affected by Covid, more likely to have lost income and more likely to have suffered mental ill-health. At the outset of the pandemic the Housing Secretary stated that no-one should lose their home because of the pandemic, but a year on this is a very real prospect for hundreds of thousands of people.

“The Government’s continued suspension of rental evictions until the end of May is a positive step, but this alone will only serve as a stay of execution for those with unmanageable rent arrears. The Government’s own research shows that private renters have been hardest hit by the pandemic yet there was no reference to renters in the recent budget while mortgage support was extended for home-owners – a real missed opportunity to do whatever it takes to help a group so disproportionately disadvantaged.

“The Government needs to build on the sticking plaster of extended notice periods, with urgent action to sustain tenancies threatened by Covid-related rent arrears. That’s why StepChange is launching its Covid Debt Rescue campaign, which is calling for dedicated financial support to help ensure landlords keep renters in their homes. Without it, people will lose their homes just as they are trying to get back on their feet, compounding their financial and social problems and acting as a drag on the country’s economic recovery.”

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