Unless the government acts fast, we could see an unprecedented spike in evictions and homelessness, as the economic repercussions of the coronavirus crisis are already hitting people’s ability to pay their rent.
As Labour’s Shadow Secretary of State for Housing, I’ve put forward a five-point plan the government needs to adopt. As a matter of principle, I believe renters should receive similar levels of support that the government is already offering homeowners and commercial tenants.
Labour’s main aim is to prevent people from falling into hardship and going into rent arrears, through a series of improvements to Universal Credit and housing benefit. But among the 21 million renters in the UK, there will be many thousands who still find themselves behind on their rent due to lost earnings from this extraordinary period. My plan aims to help these people too.
Consider this: One in five people in rented accommodation believe that they are likely to lose their jobs in the next three months because of the Coronavirus crisis, according to Shelter. That’s a lot of people at risk of not being able to pay their rent. Two thirds of private renters have no savings, a figure which goes up to four fifths for those in social housing. And a third of those households have children in them.
As a result of the current financial pressures, Citizens Advice estimates 2.6 million people are likely to fall behind on their rent over the next six weeks. For many of these people, it will be the first time they have struggled to pay their rent. After pressure from Labour, the government agreed to pause all evictions for three months, until 25 June. But this does not go far enough. The economy will take a long time to recover, and we cannot allow evictions to restart before people can start earning again.
My work in this area builds on the excellent proposals from my predecessor, John Healey, who proposed a rent deferral policy in March.
Labour’s plan for renters
1. Most importantly, it must be easier for tenants to be able to pay their rents and prevent arrears from building up if possible. This could be done immediately by following Labour’s proposals for improvements to Universal Credit.
We are pleased the government has already agreed to raise the Local Housing Allowance, meaning housing benefit will be paid up to the 30th percentile of rent in a specific area. This should be made permanent. The government should also consider the benefits of temporarily raising LHA further where needed for the life of the crisis, to prevent people from losing their homes, people who will probably be back in work fairly soon once the lockdown starts to ease.
2. The government must extend the temporary ban on evictions to allow time for other provisions to be brought in.
3. The law on using arrears for grounds for evictions needs to be amended to protect people who have got into difficulties paying rent because of the Covid-19 crisis.
4. Tenants should not be at risk from bankruptcy from failing to pay rent during the current situation. This would put residential tenants on the same footing as commercial tenants, who were protected by the Coronavirus Act from being made insolvent by their landlord if they can’t pay rent because of the crisis.
5. Once protected from eviction, tenants should then have at least two years to pay back any arrears accrued during this period. This would bring them closer to the treatment of mortgage holders, who have the lifetime of their mortgage to pay back any arrears they accrue during this period. A two-year repayment period would help tenants and landlords come to an agreement on how to deal with these arrears without putting tenants at risk of other legal action and the possibility of a damaged credit record.
Hopefully, most people will not go into arrears in the first place (see point 1) – but this six-month backstop would prevent many thousands of people from being evicted from their homes.
Many people affected by this crisis will never have been in arrears before and will be back on a reasonable income soon – so why risk making them homeless because of a temporary gap in their income?
The measures we have outlined would help us get through the immediate situation, but they will not solve the housing crisis. We need with stronger rent regulations and we need to build much more affordable and social housing, so that everyone has a home that is safe, secure, environmentally sustainable, and that they can afford to live in.
We are failing those key workers, who we go out every Thursday to clap for, if we do not face up to the fact that many of them live in homes that are overcrowded, unsafe or expensive. When we emerge from this public health crisis, we cannot go back to business as usual.