1.2 million renters are at high-risk of job loss

A new report has warned that up to 1.2 million renters are at high-risk of having to rely on Universal Credit after losing their jobs and falling through the gaps in the government’s job and income protection schemes.

Because of the ongoing effects of coronavirus, the New Economics Foundation recommends the government brings in an immediate suspension of all private rents and residential mortgages for an initial three months to protect against severe financial hardship and housing insecurity.

Housing benefit has been increased marginally for private renters, but many renters will still be pushed into hardship. Likewise, the government has announced a temporary suspension of evictions but has taken only limited action on the rent which will legally still be due, which is likely to create significant financial hardship for even better paid renters.

The 1.2 million renters identified in the report are among the 5.6 million workers at highest risk of falling through the gaps in the government’s job and income protection schemes. They will likely have to rely on Universal Credit, with it calculated that a single, full-time minimum wage worker who is forced to rely on UC could face a 45 per cent reduction in their income. For those living in London, this would leave just £55 a week (£238 a month) to pay for all essentials outside rent, such as food and utility bills. With average bills, before food, coming in at £237 a month.

The report also recommends that the Bank of England introduce low-cost loans to mortgage lenders, to smooth over any cash flow issues caused by the mortgage freeze.

Joe Beswick, head of Housing and Land at the New Economics Foundation, said: ​“Many of those in the private rented sector, a group who were already economically vulnerable before this crisis, are falling through the cracks of the government’s support systems. With many losing a substantial portion of their income in a world where on average one third of income was already spent on rent, the government must act swiftly to prevent renters from going into deep financial insecurity or hardship caused by housing costs. If we are to avoid an eviction crisis from rent arrears following the public health crisis, we must suspend the obligation to pay rent immediately.”