StepChange warns that private tenants need financial support to address £360m black hole of rent debt built up during the pandemic.
From next Tuesday (1 June) evictions for rent arrears can resume in England, yet there is no plan to help tenants and landlords resolve the £360 million of Covid-related rent debt built up over the course of the pandemic. StepChange Debt Charity says this makes it even more urgent for the Government to introduce a targeted package of grants and no-interest loans if tenants are to avoid losing their homes.
The resumption of evictions follows their temporary suspension last year to protect renters during the pandemic. The Ministry of Housing, Communities and Local Government (MHCLG) has also confirmed the shortening of eviction notice periods from six months to four months from 1 June.
In response StepChange, alongside Generation Rent, Money Advice Trust, National Residential Landlords Association, PropertyMark and Shelter will deliver proposals to MPs and officials from MHCLG and the Treasury this week setting out how the package of grants and no-interest loans could be provided in England, to sustain tenancies and act as a bridge to recovery. The proposals include:
- That the Government should make grants available to low-income households who have built up rent arrears during the Covid pandemic.
- That the Government should back a wider programme of no-interest loans - delivered by HMRC through a student loans-type scheme or another credit provider - for anyone who has been forced into rent arrears due to the pandemic who is not eligible for a grant, including the self-employed.
- That loans must be affordable: loan repayments should only commence once a person’s income reaches an affordability threshold of £20,000 per person annual income, which reflects the median of the London real living wage and national real living wage.
A full copy of the proposals can be found here.
Commenting on the end of the eviction ban, StepChange CEO Phil Andrew said:
“The rental eviction suspension was the last lifeline for many renters, who have been among the groups worst hit by the pandemic. The number of private renters in arrears has doubled since the start of the pandemic to 460,000 people. With evictions now resuming, many will be facing an uncertain future without additional financial support.
“Support from Government, like furlough and benefit uplifts, has been important in helping people through the pandemic, but not sufficient to keep many renters out of arrears. There are clear gaps in support which have seen a £360m black hole of rent debt build up over the course of the pandemic.
“The Government can help by creating an emergency package of grants and no-interest loans to help rescue those in rent arrears due to Covid. It will help keep people in their homes, avert mounting problem debt, housing insecurity and homelessness and will enable people to get back on their feet after a devastating year. What’s more, an extra 30,000 evictions would cost the public purse in the region of £225m, yet almost all of these costs can be prevented by investing a similar amount now.
“The housing secretary said in March 2020 that no-one should lose their home due to the pandemic – it’s time for decisive action to back that up.”
Notes to editors
A full copy of the proposals submitted to MPs by StepChange, Generation Rent, NRLA, PropertyMark and Shelter can be found here.