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Kicking off our housing crisis event, Lindsay Judge notes that housing arrears are climbing as the duration of the Covid-19 crisis persists....
...by late January the level of housing arrears across Britain had reached around double its normal level.
Worryingly, around 300,000 families who have fallen behind on their housing payments have dependent children, leaving them particularly vulnerable.
Why are private renters at the heart of Britain's housing crisis? Reason 1 - they have been most affected by the labour market crisis, with around one-in-four experiencing a loss of work, furlough, or a significant loss of earnings.
Reason 2 - support for renters. Despite the Government's welcome boost to Local Housing Allowance - in many areas of the UK this boosted benefit support still falls well short of covering typical rents in the local area (and this is not just a London thing).
Reason 3 - the challenge facing renters in reducing their housing costs. Home-owners have been more likely to reduce costs with their lender, than renters have with their landlord. This in part reflects the more long-term relationship mortgagors have with their lenders.
Looking ahead, Lindsay Judge warns that housing arrears will become more consequential as the crisis persists, and the eviction ban is eventually lifted.
In our thought experiment, we apply the growing housing arrears and apply it to see what it could mean for the courts resolving such issues. Bluntly, the courts will be put under severe strain, causing further problems for renters and landlords alike.
What can policy do to address this crisis? For a start, the Discretionary Housing Payments scheme can be extended so that it does a better job of reaching those in real housing distress.
We are also calling on the Government to introduce a tenant loan scheme to support renters through the arrears crisis - a policy that is already working in Scotland and Wales. It could help address the estimated £375 million of rent arrears across England.
Lindsay concludes with our plan to help resolve Britain's rent arrears crisis. Read more in our report 'Getting ahead on falling behind' https://www.resolutionfoundation.org/publications/getting-ahead-on-falling-behind/
