Coronavirus: Number of renters in arrears could triple, analysis shows

With a growing number of tenants facing financial hardship as a result of the coronavirus pandemic, there is likely to be a sharp rise in the number of private tenants in rent arrears over the next 12 months, according to fresh analysis.

With forecasters warning the joblessness will soon rise to its highest level since 2016, LSE London and Trust for London estimate that there could be three times the existing number of private tenants in rent arrears in England this time next year.

The study found that with Covid-19 continuing to have a devastating impact on the UK economy, as many as 700,000 tenants and their landlords could be adversely affected by the crisis.

These arrears could be expected to lead to at least three times the number of formal evictions as before the crisis, resulting in around 50,000 over the coming year, although an early spike in formal evictions is unlikely, since government action on notice periods until March 2021 means that landlords will normally have to wait at least six months before issuing an eviction notice to regain possession.

Furthermore, the courts are putting off hearings for months – some into 2023 – meaning that evictions could be further postponed, while the analysis also points out that most arrears cases do not lead to formal legal processes and evictions.

Christine Whitehead, emeritus professor of housing economics at LSE, said: “We’re likely to see a slow burn of evictions that will go on at least into 2022. This will leave more and more tenants – and sometimes their landlords – facing months of insecurity, mental stress and hardship.”

Increases in evictions will mean that there will be far more households in need of local authority support, with perhaps 30,000 more households placed in temporary accommodation, according to the researchers behind the analysis.

Susie Dye, grants manager at Trust for London, commented: “The research brings into sharp relief what we already knew about the private rented sector, particularly in London but also across England.

“Tenants’ lack of security mean that those losing income, maybe for the first time due to Covid, are at risk of debt and losing their homes. It might not happen rapidly due to the welcome measures the government and local authorities have taken, but stress for those affected is real.

“We’d love to see the government’s promise to stop no fault evictions enacted in the Renters Rights Bill, benefits and local authority homelessness prevention being strengthened, so that the system is not overwhelmed.”

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2 Comments

  1. letstalk

    What happens though as the banks begin to repossess these homes from the landlords who can no longer pay the mortgages as rent isn’t being received? I don’t know why everyone at these charities or these campaigners automatically assume all landlords are rich individuals. There are many incidental landlords and many who have borrowed to become landlords for pension purposes, they now face hardship too!

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  2. paulgbar666

    Pray tell why should LL even allegedly rich ones subsidise feckless tenants who haven’t made any arrangements to cover for sudden income loss?  You know like saving up or insuring for such income loss.   But no what these feckless tenants do is live it up high on the hog safe in the knowledge that due to the completely dysfunctional repossession process; made even more dysfunctional by the latest Govt edicts that they can remain rent free for probably years.   They expect to ponce off LL facilitated by stupid Govt prevention of eviction.   It seems unlike ANY other industry that LL are the only ones legally required to provide a service; in this case accommodation for free until the Govt allows them to eventually conclude a very long eviction process.   This is providing a LL has the resources to last that long with subsiding a feckless rent defaulting tenant. How many LL will be able to do this or will many as I suspect find that lenders repossess LL properties?   The idea that S21 is a non-fault NTQ is for the birds.   Most LL issue S21 for rent defaulting. Hardly non-fault.   If tenants pay their contractual rent and comply with their AST conditions they usually have tenancy security.  
    Few LL evict rent paying tenants. S21 by the way is the required way for a LL to end any tenancy. If they don’t issue one and the tenant fails to vacate as advised then the LL has to commence the S21 process to remove a tenant who fails to vacate as promised. That is why a LL ALWAYS issues a S21 even when a tenant has advised they will be vacating.   Tenants must NOT and CANNOT be trusted. LL MUST always prepare things to put themselves in the best position as quickly as possible to get rid of tenants when they have stated they intend to vacate. Tenant insecurity is entirely the fault of S21 etc.   If LL could get rid of feckless rent defaulting tenants very quickly with NO Court action required many more LL would take on riskier tenants.   The harder it is made to evict feckless rent defaulting tenants the more selective LL will be on tenant selection. It might seem counter-intuitive but the easier it is made to get rid of feckless rent defaulting tenants the more LL will be prepared to take on the riskier type of tenants. If LL cannot source quality tenants there is little point in taking on risky ones who can rent default and live for free for years. That is of course providing the LL can prevent lender repossession. It makes no business sense. Therefore LL will be selling up or diversifying into other forms of letting that don’t involve AST. Essentially what is happening is a return to the bad old days before the AST and the BTL mortgage.   Then private LL were 7% of the market.   Where did tenants live bearing in mind that the PRS now house about 17% of tenants?   Well they used to live in social housing which was fairly plentiful.   There was also a very significant demographic situation. After 1997 when dopey Bliar flung open the UK borders to the A8 countries to ‘ rub the right’s nose into diversity’ did we have over 10 million unneeded and unwanted EU migrants.   Such a mass influx of immigrants was bound to put extreme pressures on the housing market. The response of the PRS to this massive immigrant influx was magnificent. True private enterprise in action. The PRS has managed by investing enormous amounts of capital and effort to house millions of these immigrants plus also organic UK tenant demand. Unfortunately in utilising property for letting which was bought on the open market by LL many noses especially of GR has been put out of joint. So now we have the ridiculous Tories attacking the PRS for being so successful and introducing ridiculous eviction bans which are preventing LL from trading and will eventually force many LL into penury. Many of them will be bankrupted by these feckless rent defaulting tenants many of whom are receiving income sufficient to pay their rent but are refusing to pass it onto the LL because they know it will take ages for the LL to get rid of them. Effectively Govt is conspiring against LL with feckless tenants to prevent LL from operating their business.   In a complete volte-face we have the left-wing SNP and the Labour Welsh Assembly advocating that LL should be paid their rent by Govt assistance and yet the supposedly right-wing Tories are failing to advocate such assistance for English LL. Who’d have though eh!?   For some bizarre reason the Tories believe that by attacking the PRS LL they will somehow garner GR votes. Well I can assure the Tories that no matter how much they attack LL it will NOT generate a single vote from GR for them! But what the Tories will find is they face losing the 2.5 million votes of LL who will vote for the Reform Party led by Nigel Farage. The Tories are on a path to destruction if they continue with their unwarranted attacks on PRS LL. As for the projection of there being up to 700000 tenants in rent arrears try 1 million. That would be more like it and that is being optimistic. 2 million would be far more realistic figure!!            

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