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1 June, 2020 Open access

Tenants are up to twice as likely as mortgagors to have fallen behind with housing costs since coronavirus crisis started

New report from Resolution Foundation recommends temporary rent reductions or rollovers as 'sensible next step' to support renters

Tenants are up to twice as likely to have fallen behind with housing costs than mortgagors since the coronavirus crisis started, according to the Resolution Foundation

In Coping with housing costs during the coronavirus crisis, the Resolution Foundation presents findings from a survey of more than 6,000 working-age people with housing costs, including that one-in-eight (13 per cent) of private renters and one-in-six (17 per cent) of social renters have fallen into (or further into) rent arrears, compared to just one-in-twelve (8 per cent) of mortgaged home owners.

The Foundation attributes this variation to a number of factors including that -

As a result, the Foundation calls for greater protection from falling into arrears for families (and landlords) by suspending universal credit capital rules and lifting the benefit cap. In addition, the Foundation says ‘an eminently sensible next step' for the government to support renters work through arrears in future months is to provide tenants and landlords with explicit rules for temporary rent reductions or arrears rollovers.

Commenting on the report, Principal Research and Policy Analyst at the Resolution Foundation Lindsay Judge said -

‘Britain already had a huge housing divide before coronavirus struck, and the current economic crisis has only widened that gap.

People living in private rented accommodation have found it harder to meet their housing costs than homeowners in recent months, and harder to negotiate reductions in those costs. The result is that a quarter are cutting back on other spending, in many cases on essentials, to cover their rent during this crisis.

Policy makers need to recognise that, while the 1990s recession was infamously most severe for the UK’s home owners, this recession is biting hardest for renters.’

For more information, see Private renters fifty per cent more likely to have fallen behind with housing costs than mortgagors from resolutionfoundation.org