Almost one in eight private renters are unable to meet their housing costs in full

Resolution Foundation report finds marked change from earlier survey results that showed tenants were managing their housing costs at the outset of the pandemic

Almost one in eight private renters are unable to meet their housing costs in full, according to the Resolution Foundation.

Highlighting that, in May 2020, it’s survey of 6,000 UK working-age adults showed that they were managing their housing costs at the outset of the coronavirus (COVID-19) pandemic, the Resolution Foundation revisits the issue of housing affordability six months on through a survey of a similar sample of UK adults.

However, despite reporting some improvements in the labour market since the spring, the survey highlights that housing costs are a serious concern for many households.

Key findings include that -

• a higher share of renters is now reporting job losses compared to May 2020, with both private and social renters now more than twice as likely as mortgagors to have lost their job (eight per cent of private renters and seven per cent of social renters, compared to three per cent of mortgagors);
• more than one-in-six (17 per cent) of social renters report being behind on all, or part, of their housing costs, with nearly one-in-eight (12 per cent) private renters also unable to cover their rent in full (compared to one-in-fourteen or 7 per cent of mortgagors);
• close to one-in-seven black, Asian or minority ethnic adults are currently behind on housing costs, almost double the one-in-fourteen (seven per cent) of white respondents; and
• the benefits system is taking more of the housing costs strain, with the proportion receiving support up from 8 per cent in the spring to 10 per cent today - most strikingly, the claimant rate of private renters has increased by a third in this period.

Given these findings, and in the context of changing policy on wage subsidies, uncertainty about whether benefit increases will continue, and early coping strategies adopted by lenders, landlords and individuals beginning to ‘wear thin’, the Foundation says -

‘… robust action on housing costs is crucial if large numbers of families are not to be put under acute strain. A clear commitment from government to maintain the current level of housing costs support (at the 30th percentile of local rents) would be a big step in the right direction, as would a prolonged suspension of the benefit cap and extension of the evictions ban. But in the final analysis, the benefit system and the courts cannot resolve the fundamentals: that private rents in particular are now set too high, and need to be encouraged to move to a ‘new normal’ (we see no evidence to date of movement towards a new equilibrium in the market). The key question is, how can policy makers encourage that to happen?’

For more information, see Coping with housing costs, six months on from resolutionfoundation.org