Image: Bristol Property Centre
By Vicky Spratt Friday, 27th March 2020
What support has the Government actually announced for this huge demographic? And is it up to scratch?
Angry cries of “what about renters” echoed across social media last week when the Government announced that homeowners would be allowed mortgage holidays to mitigate any financial hardship caused by the economic consequences of the coronavirus pandemic.
If you do not own your own home in Britain, precarity is a fact of life. It comes in the form of rent rises, eviction notices and knowing that, ultimately, your landlord has control over the one place in the world you should feel secure.
Typically, private renters are worse off than homeowners: they spend a higher proportion of their income on housing, 63 per cent of them have no savings and the housing charity Shelter estimates that almost half of working renters are just one paycheck away from losing their home.
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The coronavirus outbreak has laid all of this instability in Britain’s private rented sector – which is home to around 20 million people – bare. So, what support has the Government actually announced for this huge demographic? And is it up to scratch?
What is changing with evictions
Things were promising at first when the Chancellor, Rishi Sunak, said that new legislation would be introduced to “ban” evictions for both private and social renters over the course of the next few months. However, when the emergency coronavirus bill was actually published on 23 March, the section on evictions was found seriously wanting.
The proposed ban, it turned out, was not a “ban” at all. Giles Peaker, an expert housing solicitor and partner at Anthony Gold, told i: “This is not a ‘complete ban on evictions’ as the Government promised. It is, at best, a short delay on possession proceedings, and even then only where an eviction notice is served after the date [the law comes into] force. Existing possession claims and notices served now [before the law comes into effect] can still lead to possession proceedings.”
“There is nothing to help protect anyone facing rent arrears due to the effects of coronavirus. They just get an additional month or two before facing a possession claim.”
A full ban on evictions has since been announced
As things stood then, there was also no guidance on evictions which are already in progress. There were an estimated 20,000 cases which represent people who could still have been legally evicted and lost their home in the next three months without further clarity from the Government.
“The courts may be delaying existing possession claims. Some are, some aren’t yet,” Peaker explained. “It is confused right now. But that is nothing to do with the Government or this legislation, it is the courts trying to sort out their own coronavirus problems.”
However, on 27 March, following lobbying from Shelter, Peaker and others, the Government changed course. They amended the legislation and introduced a full ban on evictions during the crisis we all now face.
The Government announced that from 28 March, the court service would suspend all ongoing housing possession actions – this means that neither cases currently in or about to go in the system can progress to eviction.
This is the reassurance thousands of renters needed. The suspension of housing possessions action will initially last for 90 days, but this can be extended if needed.
Polly Neate, chief executive of Shelter, said of the move: “We’re very glad to see the Government has changed its approach and is now introducing a full ban on evictions, giving much-needed protection for renters at this critical time. Robert Jenrick should take a lot of credit for having listened and taken further action – as a result many thousands of people can now stay safe in their homes.”
If you can’t pay your rent
Understandably, many renters are worried about paying their rent. We know that many people – particularly the self-employed, people on zero-hours contracts and those working in hospitality and retail – have already seen their income affected by this crisis.
At first, the Government support for the self-employed was lacking. This caused great anxiety for renters without PAYE income. They did say, however that landlords can take a “mortgage holiday” if their tenants are unable to pay rent and encouraged landlords to be “compassionate” in such situations.
This means that if you find yourself unable to pay rent because of this global pandemic, you must speak to your landlord and try to reach an agreement about a rent reduction or delayed payment. However, there is no legislation explicitly compelling landlords to give their tenants a break. The Government has intimated that they will be publishing further advice for renters as things progress, but there’s no sign of it yet beyond advice to avoid moving house if possible.
Benefits if you lose your job
Boris Johnson said in an address to the nation: “We must act like a wartime government and do whatever it takes to support our economy.” This was echoed by Sunak who repeated the refrain “we will do what it takes” over and over again.
They initially unveiled support for businesses which would have been unthinkable for a Conservative government just weeks ago. This included help to pay their staff via a government grant which will cover 80 per cent of an employee’s wages, up to £2,500 a month. So, for renters in employment, this was good news.
Support for the self-employed was notable by its absence, but on 26 March, Sunak also announced an 80 per cent income support scheme for self-employed workers. It’s understood Sunak spent days “kicking the tyres” on this package of support which you can read more about here. However, it looks as though this money won’t be available until June, which could still leave any renters who work for themselves needing to apply for Universal Credit to tide them over and to have an urgent discussion with their landlord.
For any renter who does lose their job or source of income, however, there was some good (if modest) news. On 20 March, Sunak announced that the standard Universal Credit allowance will be raised by £1,000 a year.
At the same time, he told the nation that the Local Housing Allowance (which decides what housing benefit is available) will be increased so that it covers at least 30 per cent (or the lowest third) of market rents in any given area. This means that renters who claim support via Universal Credit will be able to get more towards their rent than they would otherwise have been.
However, it’s worth noting that when it was first introduced in 2008, the Local Housing Allowance covered 50 per cent of market rents. It was then lowered to 30 per cent before being reduced further and capped by George Osborne in 2015. In that time, rents have continued to rise beyond incomes in many parts of the country making it difficult for tenants to make ends meet. So, while bringing it back up to 30 per cent during this crisis is something, it’s still not enough when you consider the fact that rents are already unaffordable for so many.
More is expected from the Treasury over the coming weeks.
In the meantime, you can find out more about what you can claim here and apply for Universal Credit on GOV.UK. Visit Shelter’s Coronavirus support page for advice if you run into financial difficulty as a renter.
Article by Vicky Spratt: i’s Housing Correspondent.