Housing, Communities and Local Government Committee report calls for action on rent debts

A report published today by the Housing, Communities and Local Government Committee calls for support for renters in the private sector who are in arrears, including a recommendation for funding for some rent debt write-off.

It is welcome that the recommendations from the committee recognise the scale of the challenge brought on by Covid-19 for thousands of private renters, and that a more extraordinary solution is needed for these extraordinary circumstances.

The report draws on findings from the Resolution Foundation that current rates of rent arrears are at least double the pre-Covid ‘norm’. It recognises that the increasing scale of the issue of rent debt is beyond the scope of existing solutions, and those already put in place by government to protect renters during the pandemic. According to the report, hardship funds and the moratorium on evictions ‘fail to prevent a cliff edge of evictions once the moratorium on possession cases ends.’ To deal with the situation, additional measures are needed.

The proposals estimate that around £250 million will be needed to deliver the necessary rent relief package to address this. This could be delivered through grants, low-interest loans, or through discretionary housing payments, and the report recognises the benefits and challenges of each method.

Not only does the report justify the need for this action in protecting renters from losing their homes, but also states the knock-on effects of failure to act. It includes findings from the London School of Economics which forecast that it would cost the Exchequer around £225 million if an extra 30,000 households were evicted. It also recognised the challenge for small landlords, and that support for renters and support for landlords were ‘two sides of the same coin’, referencing NRLA data which suggests that around 23% of landlords have lost rental income due to Covid-19.

For Reset the Debt, the financial incentives for intervention are only one element of why we’re calling for debt write-off. One of the founding aims of the #ResetTheDebt campaign was that nobody would lose their home because of Covid-related debts. The trauma, pain and long-term hardship created by eviction can have widespread consequences for families. Support now is about enabling long term flourishing, for every family involved.

And for many of these families, rent arrears are only part of the picture. Other priority debts, such as council tax and utility bills, and even borrowing from friends and family, are all part of the burden weighing millions of families down because of Covid-19.

The recognition in this report that write-off must be part of the solution to the crisis in household debt must not be limited to rent debt alone, but extended to other kinds of debts which have built up as a result of the pandemic.

In the window of time before the furlough scheme ends and other protections come to a halt, we have a chance to greaten the amount of pain that can be spared by not allowing a tsunami of rent-related evictions and debt collection to hit families.  

We welcome the proposals in this report which place write-off at the centre of the solution to rent arrears. Now it’s time to extend this principle to all kinds of debts incurred as a result of Covid-19. It’s time to #ResetTheDebt.

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