Resolution Foundation calls on government to follow Scotland and Wales in establishing a tenant loan scheme to support renters in England who have fallen into arrears during pandemic

Think tank highlights that private renters have been particularly hard hit, and recommends that landlords must be required to take 'robust action' to negotiate a payment plan before taking tenants to court

The Resolution Foundation has called on the government to follow Scotland and Wales in establishing a tenant loan scheme to support renters in England who have fallen into arrears during the Covid-19 pandemic.

In a new briefing note, Getting ahead on falling behind: Tackling the UK's building arrears crisis, the Resolution Foundation examines how families have managed their housing costs over the Covid-19 pandemic, and makes recommendations for the government on what it needs to do if arrears are to be managed in an orderly manner as the Covid-19 period unwinds.

Using new data from a representative survey of UK working-age adults, the Resolution Foundation estimates that in January 2021 -

• 9 per cent of families in the social rented sector were behind with their housing payments;
• 6 per cent of those renting privately were behind; and
• 2 per cent of mortgaged home owners were in arrears.

Representing at least twice the level of arrears that were present going into the crisis, the Resolution Foundation highlights that the figures equate to more than 750,000 families being behind with their housing payments, of which 300,000 contain dependent children.

While noting that no tenure group has gone unscathed during the crisis, the Resolution Foundation concludes that - 

'... private renters have been hit particularly hard. Whether we look at exposure to the labour market shock, the ability to negotiate lower housing costs for a temporary period, or eligibility for emergency housing support, private renters appear consistently at a disadvantage compared to mortgaged home owners and social renters. Moreover, as the crisis drags on, strategies such as drawing down on savings or relying on forbearance to cope with housing costs are likely to wear thin. The hoped-for economic recovery in 2021 will not deal with the problem of accumulated arrears, and there is a real danger that the courts could become overrun with the backlog of cases.'

Accordingly, the Foundation calls on the government to take decisive action including to - 

• follow the Scottish and Welsh Governments in offering tenant loans underwritten by the State - at a cost of around £375 million to cover English private and social renters;
• deliver on its promise of a pre-action protocol for private renters, and require landlords to take 'robust action' to negotiate a payment plan with indebted tenants before proceeding to court;
• fund the discretionary housing payment budget to at least the same level as 2020/2021 and, recognising the exceptional circumstances of the last year, allow councils to roll-over any underspend to 2021/2022; and
• continue to support those on the lowest incomes by retaining the universal credit uplift of £20 per week beyond the end of March 2021.

For more information, see Getting ahead on falling behind: Tackling the UK’s building arrears crisis from resolutionfoundation.org