The government has offered unprecedented support to employees and many businesses with the offer of the furlough scheme to pay 80% of wages up to a maximum of £2,500 per month. Now tenants are asking for some support for their financial situation from the government. Banks and building societies are offering repayment holidays on mortgages and loans, although for tenants, the support to date has been rather more hit and miss, largely at the discretion of landlords and the pressure on them has therefore been mounting.
Campaigners on behalf of tenants and renters’ unions across the country are looking to the government, asking that rents be suspended for the duration of the COVID-19 pandemic currently affecting the UK. For many, the lockdown restrictions on freedom of movement have meant the loss of work and, even with the best intentions, the government’s furlough scheme is not enough to cover everyone. For some renters, the choice is as stark as paying rent or being able to feed the family.
Research agency, Opinium, commissioned by The Guardian newspaper, has conducted a poll to see how the Coronavirus is affecting tenants and the results suggest that as many as one in every six renters is struggling financially and needing to find additional funds to pay rent. That might be from savings, but is also coming from loans and credit cards, or overdrafts as they struggle to make ends meet in the current crisis.
A spokesperson for one group campaigning for renters’ rights – Acorn – believes that without some sort of government intervention and support, things will reach a head between landlords and tenants. For many landlords, receiving rent on time is crucial to keeping their business afloat and for many tenants, the situation is every bit as pressurised, possibly with no prospect of additional income and multiple demands on limited funds.
It is a collision path that shortens every day and Acorn worries that there will be a significant rise in the rate of evictions. That could be a social issue lasting far beyond the current health crisis as the effects of personal debt reached to meet rent could run and run. The research suggests there is some evidence to suggest that eviction proceedings have already started for some.
This puts renters in a near-impossible situation, especially those with no income at the moment. They find themselves having to take on various low-paid jobs – often flouting social distancing rules – just to make ends meet, or in some cases reduce the gap between wages and arrears.
With more than 140,000 companies applying for the furlough scheme on the first day they were able to claim, the total bill is expected to top £40 billion and the government will need to draw lines somewhere. Even if support were announced at this stage, the delay in receiving support could be too much for tenants facing potential eviction and some property inspection processes are already starting with a view to taking action.
Even with the furlough scheme, there will be businesses taking the opportunity to achieve economies in longer-term staffing and some jobs will be lost. One possible solution could be to suspend all payments of rent, affording a degree of breathing space to renters and keeping tenants and their families safe from debt, from losing their home and from putting themselves at risk of contracting or spreading COVID-19.
Whatever decisions are taken, or not taken, the housing market and society as a whole will be feeling the repercussions for many years to come as the economic ramifications of this period are felt.