Generation Rent has warned that homelessness could treble as a result of the Covid crisis but the National Residential Landlords Association has accused the campaign group of “scaremongering”.
Generation Rent says that private tenants face a debt crisis as from the economic shock caused by the pandemic and there could be a huge spike in people losing their homes unless the government acts.
It says that there is no protection beyond August 23 when the eviction ban ends.
The group warns that rates of rent arrears have risen from 4 per cent before the pandemic to around 13 per cent now, according to recent polls.
It says that 15,030 private renter households were made homeless as a result of eviction for rent arrears in 2019, so if this figure trebles in line with the increase in arrears that could result in 45,000 households being made homeless.
Generation Rent says this would cost councils an extra £117m in temporary accommodation and other support.
However the NRLA has rebuffed the claims as “unfounded”, citing independent polling of 2,000 tenants in England and Wales which showed that 90 per cent have been able to pay their rent as usual since the coronavirus crisis began.
It found that 82 per cent had not needed to ask their landlord for any support, but of those who did, 75 per cent received a positive response.
The same poll found that of tenants with no arrears before the pandemic, 3 per cent have had to reduce the amount they pay in rent since the outbreak began and 1 per cent had stopped paying their rent altogether.
A further 1 per cent said that they had rent arrears building prior to lockdown, which have continued to increase.
Generation Rent is calling for the government to introduce a new coronavirus home retention scheme, which would clear rent arrears not covered by the welfare system by guaranteeing landlords’ income up to 80 per cent of the rent.
It also wants government to suspend all evictions relating to rent arrears that have arisen due to the pandemic, beyond August 23.
Raise the Local Housing Allowance further to cover median rents and expand eligibility for Universal Credit, so that people are not forced to borrow or run down savings to keep a roof over their heads.
Generation Rent estimates the measures would require £750m per quarter.
Generation Rent director Baroness Alicia Kennedy says: “There is a rent debt crisis and renters are at risk of losing their homes.
“The government has already intervened to stop businesses from going under, and mortgage holders from losing their homes.
“They need to give the same protections to renters who still face losing their home or going bankrupt as a result of rent arrears.
“There are too many holes in the welfare system and our package of measures would ensure no renter faces destitution or becomes homeless due to Covid-19.
“But with the economy contracting, the government should not be expected to sustain rent levels set when the economy was strong. That’s why we propose that landlords would only be guaranteed up to 80 per cent of their rent.”
NRLA policy director Chris Norris says: “Our survey reflects what we know from our members, which is that nearly all are seeking to support tenants to stay in their homes. Given that some 30 per cent of landlords have reported facing some level of financial hardship, they will do all they can to sustain tenancies.
“That said we do support calls to boost the finances available to tenants who are struggling to pay their rent, especially as the furlough scheme begins to wind down. This should include ensuring that benefits cover the cost of rents.”
