Chancellor urged to use budget to tackle rent debt crisis

Housing charities and groups that represent landlords and renters fear risk of homelessness due to economic impact of Covid

The chancellor must take action to tackle the rent debt crisis in the forthcoming budget, housing charities and groups representing landlords and renters have said.

In a joint statement released by organisations including the Big Issue, Crisis, Shelter, Citizens Advice, Joseph Rowntree Foundation and Nationwide Building Society, Rishi Sunak was called upon to act now to avoid renters “being scarred by debts they have no hope of clearing and a wave of people having to leave their homes in the weeks and months to come”.

The statement, which they said was from “organisations with the aim of sustaining tenancies wherever possible” said at least half a million private renters are in arrears due to the economic impact of Covid-19. “The UK government’s own research shows that ‘private renters report being hardest hit by the pandemic’. Renters and landlords whose finances have been affected since lockdown cannot keep tenancies going without additional financial support.”

The statement said the organisations welcomed many of the measures taken to date, which have helped to sustain tenancies in the short term. But said they “do not go far enough to adequately protect renters going forward”.

“The longer the chancellor waits to take action, the more rent debts will increase, and the greater the risk of homelessness will become. Without additional support, more renters will lose their homes in the coming months, with the risk of an increase in homelessness.”

The statement is calling for a targeted financial package to help renters pay off arrears that have built up since lockdown first began in March last year. They said this will help to sustain existing tenancies and keep renters in their homes – while also ensuring rental debt does not risk them finding homes in the future.

Secondly, they are calling for a welfare system that provides renters with “the security of knowing that they can afford their homes”.

It follows recent calls by the Resolution Foundation thinktank for the creation of a £375m tenant loan scheme for people struggling with private and social rent arrears in England, which would use a model first developed in Spain and since introduced in Wales and Scotland.

“The pandemic has shown how vital this is to providing security at a time of crisis,” the joint statement said, pointing out that the government increased universal credit and housing benefit last year, yet it has chosen to freeze housing benefit rates again from April and is considering cutting the £20-a-week universal credit uplift at the same time.

“It cannot be right that these measures could be pulled away from renters during continued economic uncertainty,” the statement said.

Ride Out Recession Alliance, Money Advice Trust, The Mortgage Works, National Residential Landlords Association, Propertymark and StepChange Debt Charity were also signatories of the statement.

A government spokesperson said: “We’ve put households at the heart of our decision-making throughout the pandemic, with a £280bn package keeping millions in work, temporarily bolstering the welfare safety net by more than £1,000 a year for families, and backing businesses with loans and grants.

“We’re supporting renters by extending notice periods and banning bailiff enforcement of evictions for all but the most serious cases. Councils can also provide additional help through the £180m discretionary housing scheme.”

source: Nicola Slawson

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