Coronavirus: Private rent should be suspended to help one million UK workers whose jobs are threatened, think tank says

Tenants could be missing out on government support schemes, New Economics Foundation says

Zoe Tidman
Monday 04 May 2020 17:34
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Rishi Sunak lays out support for renters

Private rent should be suspended to help more than one million workers at risk of losing their jobs in the coronavirus crisis, a think tank has suggested.

Around 1.2 million renters could become unemployed due to social-distancing measures, research by the New Economics Foundation (NEF) found.

Many of these could miss out on the government’s job and income protection schemes, the think tank claimed.

The NEF report recommends the government suspends all private rent and residential mortgages for at least three months to protect people from serious financial difficulties and housing insecurity.

“Many of those in the private rented sector, a group who were already economically vulnerable before the crisis, are falling through the cracks of the government’s support systems,” said Joe Beswick, the head of housing and land at the think tank.

“With many losing a substantial portion of their income in a world where on average one third of income was already spent on rent, the government must act swiftly to prevent renters from going into deep financial insecurity or hardship caused by housing costs.”

People who cannot access government support schemes during the pandemic may have to rely on universal credit, which could represent a “significant income shock” – and it could take a while for the first full payment to come through, the think tank said.

Furloughed employees may also struggle financially, the report claimed, as the government pays 80 per cent of wages while rent takes up around a third of renters' salaries on average.

Mr Beswick said: “If we are to avoid an eviction crisis from rent arrears following the public health crisis, we must suspend the obligation to pay rent immediately.”

A government spokesperson said: “The government has put in place unprecedented measures to support tenants facing financial hardship because of coronavirus and emergency laws mean no renter can be forced out of their home – no eviction proceedings can start for three months nor can existing cases proceed.”
They added: “We have also worked with the banking industry to provide three month mortgage holidays to people, including landlords, who are experiencing financial difficulties due to coronavirus, giving them the necessary time to recover.”

The UK introduced emergency legislation in March to ban all evictions to protect tenants during the coronavirus crisis.

The prime minister said at the time: “We cannot penalise people for doing the right thing, nor can we penalise people when you have an economic upset which is a direct result of the government’s actions, the government’s advice, which are intended to protect the public.”

A national lockdown has been in place since March, with people ordered to stay at home unless it is necessary to leave, to contain the spread of Covid-19.

More than 186,500 people have tested positive for the virus in the country as of Monday.

And 28,734 coronavirus patients have died to date, the health ministry said.

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