Today in politics: CIH warns of PRS crisis and Labour pushing for tenant loans
The Chartered institute of Housing has warned more support is needed, claiming the PRS is reaching ‘crisis point’ as Labour pushes the government on plans – put forward by the NRLA – to offer loans to tenants to cover rent payments.
CIH warns of PRS crisis
The Chartered Institute of Housing has warned of a crisis in the PRS in its UK Housing Review Autumn briefing.
Of note, in a section titled, “The evictions threat in the private rented sector” it notes: “The likelihood of increased evictions in the private rented sector (PRS) and subsequent surge in homelessness has been one of the biggest housing risks during the pandemic, especially as the sector has a significant proportion of vulnerable tenants.”
It goes on later in the chapter to say: “Landlord bodies had initially been optimistic about the effects of the crisis, with a survey in May showing 90 per cent of tenants paying rent as usual.
“By September, however, more than one-in-five landlords had lost rental income, which the National Residential Landlords Association (NRLA) assessed as meaning rent losses due to the pandemic of between £328 million and £437 million in England.
“Some 16 per cent of landlords were planning to leave the market or sell properties as a result. The NRLA joined with other bodies to call on the government to set up a tenant loans scheme in England like the ones in Wales and Scotland. At the moment, apart from benefits, the only extra financial support available in England is via discretionary housing payments, whose availability depends on local criteria. CIH, Crisis and other bodies have called for wider measures, including more ambitious benefits changes and ending the denial of benefits due to immigration rules.
“There is a sense of a crisis looming which has not yet played out, given that some protections are in place and evictions have not yet begun on any scale, delayed both by the extended notice periods and a backlog of cases in the courts.
“Given the prospect of furlough arrangements ending and job losses increasing, the numbers in arrears could escalate rapidly.
Later in the report it notes: “As a further part of the coronavirus response, local housing allowance (LHA) rates were restored to the 30th percentile of market rents (on top of the previously announced unfreezing of LHA). Although this increase was widely welcomed, CIH and Shelter analysis shows the new LHA rates do not cover three in every 10 homes in an area, leaving many without adequate support to cover their actual rent. Higher benefit payments through LHA may also mean claimants are more likely to see their benefits capped.”
Labour puts pressure on government over tenant loans
Grahame Morris MP (Labour, Easington) has received a response to his written question asking if MHCLG will consult local government and industry experts on the potential merits of introducing a Tenant Loan Scheme in England.
Housing Minister, Christopher Pincher MP, responded: “We regularly engage with a range of stakeholders on different issues relating to the private rented sector, including on financial pressures. This Government has provided an unprecedented package of financial support to protect renters whose income has been affected throughout the COVID-19 pandemic.”
He went on to note that:
- The LHA has been increased to the 30th percentile which, he said, “will remain in place throughout the winter period until at least the end of March 2021.”
- Renters have been supported by the Coronavirus Job Retention Scheme and measured within the Winter Economy Plan.
- There is an existing £180million of Government funding for Discretionary Housing Payments made available this year, an increase of £40 million from last year.
- “These measures enable renters to continue paying their rent and we will closely monitor the ongoing impact of the pandemic on renters.”
