Debt charity StepChange has warned that private tenants will need financial support to address the £360 million black hole of rent debt built up during the pandemic.

From today (Tuesday 1st June) evictions for rent arrears can resume in England, however, the debt charity has highlighted that as yet there is no plan to help tenants and landlords resolve the £360 million of Covid-related rent debt built up over the course of the pandemic. StepChange Debt Charity says this makes it even more urgent for the Government to introduce a targeted package of grants and no-interest loans if tenants are to avoid losing their homes.

The resumption of evictions follows their temporary suspension last year to protect renters during the pandemic. The Ministry of Housing, Communities and Local Government (MHCLG) has also confirmed the shortening of eviction notice periods from six months to four months,

In response StepChange, alongside Generation Rent, Money Advice Trust, National Residential Landlords Association, PropertyMark and Shelter will deliver proposals to MPs and officials from MHCLG and the Treasury this week setting out how the package of grants and no-interest loans could be provided in England in order to sustain tenancies and act as a bridge to recovery. The proposals include:

  • The Government should make grants available to low-income households who have built up rent arrears during the Covid pandemic.
  • The Government should back a wider programme of no-interest loans – delivered by HMRC through a student loans-type scheme or another credit provider – for anyone who has been forced into rent arrears due to the pandemic who is not eligible for a grant, including the self-employed.
  • Loans must be affordable: loan repayments should only commence once a person’s income reaches an affordability threshold of £20,000 per person annual income, which reflects the median of the London real living wage and national real living wage.

Commenting on the end of the eviction ban, StepChange CEO Phil Andrew said “The rental eviction suspension was the last lifeline for many renters, who have been among the groups worst hit by the pandemic. The number of private renters in arrears has doubled since the start of the pandemic to 460,000 people. With evictions now resuming, many will be facing an uncertain future without additional financial support.”

“Support from Government, like furlough and benefit uplifts, has been important in helping people through the pandemic, but not sufficient to keep many renters out of arrears. There are clear gaps in support which have seen a £360mblack hole of rent debt build up over the course of the pandemic.”

“The Government can help by creating an emergency package of grants and no-interest loans to help rescue those in rent arrears due to Covid. It will help keep people in their homes, avert mounting problem debt, housing insecurity and homelessness and will enable people to get back on their feet after a devastating year. What’s more, an extra 30,000 evictions would cost the public purse in the region of £225m, yet almost all of these costs can be prevented by investing a similar amount now.”

“The housing secretary said in March 2020 that no-one should lose their home due to the pandemic – it’s time for decisive action to back that up.”

Separately Citizens Advice has said that it has seen an increase in the numbers of private tenants are asking for help with the protections put in place for renters during the pandemic ending on 31st May. The charity says that its online housing advice has been viewed over 2 million times in the first four months of the year.

Citizens Advice data shows a 17% increase in people with issues about being evicted from their private rented accommodation, comparing January – April 2021 with January – April 2020. There has been a 36% increase in the number of people seeking help with all types of problem in the private rented sector (31,700 in January – April 2021 vs 23,400 people in January – April 2020)

A poll conducted by ICM Unlimited for Citizens Advice also shows that, in the UK:

  • Almost 1 in 10 private renters (8%) are behind on their rent. This equates to over 350,000 tenants across the country.

  • The average amount of arrears owed has risen by 24% in the last few months from £730 in November 2020 to £907 in April 2021.

The charity is calling on the Westminster government to provide a package of financial support, delivered through grants and government-backed loans, for renters in England facing arrears due to the economic effects of the pandemic.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said “The sticking plaster applied to the English private rented sector during the pandemic has been ripped off. Ending the eviction ban puts thousands of renters at risk of losing their home. The government should put in place a system of grants and government-backed loans for renters in England who are still financially struggling because of Covid-19.:

“The lack of security renters in England will face from Monday is a symptom of a longer-term problem where tenants can be evicted without cause. The government has committed to ending no-fault evictions and it’s vital this is urgently enshrined in law in their forthcoming reforms to the private rented sector. “