3 signs we’re heading into a rent arrears crisis
Since the start of the pandemic, we’ve helped over 950,000 people by phone, email and webchat and have seen 43 million views on our website. Helping this many people gives us unique, real-time insight into the challenges people are facing as a result of coronavirus.
Coming out of the first lockdown, we estimated that 6 million people were behind on their bills. As the pandemic continues and restrictions are reintroduced, we’re noticing a worrying trend for people behind on their rent.
Here’s 3 signs we’re heading into a rent arrears crisis — and what the government can do to avoid it.
1. We’re helping someone with a private rented sector issue every 2 minutes
In October, we helped 7,700 people facing issues with their private rented homes — that’s 34% more people than the same time last year.
It’s clear that renters are being hit hard by the pandemic — and that their need for support is only increasing.
2. We’ve seen a 45% increase in views of our main rent arrears webpage
We estimate that, in total, people who fell behind on their household bills in the first 3 months of the pandemic built up £1.6 billion in arrears. Rent is by far the largest source of arrears, making up around £909 million of that total figure.
As people have struggled to pay their rent throughout the pandemic, we’ve seen more and more people turn to our website for advice. In October, there were 45% more views of our webpage ‘dealing with rent arrears’ than the same time last year. There were also 16% more views of our section 8 evictions webpage in October than last month.
3. It’ll take people, on average, 7 years to pay back their rent arrears
With ongoing restrictions and a difficult economic environment, it’s not becoming any easier for people to pay their bills, let alone start to pay back their debts. It would take the people we help with rent arrears an average of 7 years to pay off their debt.
For many people who’ve faced a loss of income during the pandemic, their rent arrears leave them with unmanageable debt and at risk of eviction.
Jason is just one of many people who are concerned about supporting their family while dealing with significant rent arrears.
Jason's story
Jason is an agency worker who lives in a rented home with his partner and 2 children, aged 6 and 10. When the pandemic hit, his agency lost a lot of business and gave him no work.
For the last 4 months, Jason’s workplace gave him reduced hours, meaning he earned only half his wage from before the pandemic. As his partner can only work part-time, he now has 4 months of rent arrears worth £2,900. His landlady is charging overpayment of £150 per month. If he misses a deadline, she’ll add a 2.8% interest rate.
Jason is worried about whether he can pay off his debts with his current earnings — or, worse, whether he might get laid off again due to the pandemic and become unable to support his family.
The government must step in to support renters
It’s encouraging that the government has committed to a ban on bailiff enforced evictions in most cases until 11 January. However, possession action is ongoing and many people are facing further shocks to their income. Urgent action is needed to avoid leaving millions of renters with spiralling debt and at risk of eviction.
Existing support, like the Coronavirus Job Retention Scheme and the recently announced Covid Winter Grants Scheme, is welcome but not targeted at renters. The government should put in place a national programme of loans and grants to help people who have fallen behind on rent due to the pandemic.
Grants should be directed at people in the most financial difficulty, like those who are eligible for benefits or who wouldn’t be able to repay a loan in 5 years. The loans should be government-backed and interest-free. This will bring England in line with Scotland and Wales and will help renters move forward following the pandemic.
