Today in politics: Rents fluctuate as workers move out of cities, Covid hits incomes and benefits payments
Today we look at new figures showing rents are falling in cities and increasing in more rural areas - while statistics from news reports show more support is needed for tenants.
Country rents up as urban levels fall
Rural rents are up by 5.5% as levels in cities fall by 5.3%, according to new figures from estate and lettings agency Hamptons International.
Its lettings index for October 2020 says:
- The average cost of a newly let property in Great Britain rose to £1,041 pcm in October, up 1.4% on the same month last year, marking the first annual increase since March 2020.
- In a reversal of last year, rural rents rose more than in cities. Average rents in the country increased 5.5% year-on-year in October, more than triple the national average, while rents in cities fell by 5.3%. This is due to a shift in tenant demand, with more renters looking to live in the country rather than cities. As a result, there were 29% more homes available to rent in cities and 48% fewer to rent in the country during October than at the same time last year.
- Rental growth accelerated across Great Britain in all regions apart from London (-0.6%) and Wales (-0.4%). Rents in London fell for the eighth consecutive month in October as the gap between rental growth in Inner (-14.9%) and Outer (3.3%) London widened to the largest differential on record.
- The biggest rental growth was seen in the North of England and the South West where rents rose 5.9% year-on-year last month. Rents in the North reached a record high of £689pcm.
Support needed for renters says Rowntree Foundation
A total of 18% of PRS households where at least one adult is in work are expected to experinces financial problems as a result of the pandemic
The Joseph Rowntree Foundation has published a new report on support needed for renters who are struggling after polling 2,989 private and social renters between 20th and 27th October. Among the findings it says:
- A total of 18% of households with at least one adult in work in the private rented sector, and 16% in the social rented sector, are expecting a ‘negative income event’ such as a redundancy, reliance on job support schemes, or a fall in earnings or hours, in the next month.
- 61% of renter-households who are expecting a negative income event in the next month are worried about paying their rent in the next three months.
- A third of all private renters (33%, 1.5 million households) and a quarter (27%) of social renters (1.2 million households) had a fall in their household’s overall net income since March.
- A total of 55% of private renters and 51% of social renters who have had a decrease in income since March are worried about paying their rent over the next three months.
- A total of 30% of all private renting households (1.3 million households) are worried about paying their rent in the next three months, compared to 19% (850,000 households) immediately pre-COVID-19.
- Around 700,000 (8%) of all renting households in Great Britain are currently in arrears with their rent, up from 450,000 (5%) immediately pre-COVID-19. A total of 1.7 million of all renting households (19%) in Great Britain are currently in arrears with their household bills, such as council tax and electricity, up from 1.25 million (14%) immediately pre-COVID-19.
- Of the roughly 200,000 (5%) households in rental arrears in the private rental sector, around 80,000 (40%) have arrears of more than £1,000, and 15,000 (7%) have arrears more than £3,000. In the social rented sector, of the approximately half-a-million (12%) households in arrears, 125,000 (25%) have arrears of more than £1,000.
It calls on the Government to:
- Reinstate the repossession eviction ban until lockdown ends
- Establish a targeted grant programme to support private and social renters who have fallen into arrears which they will otherwise struggle to pay, as called for by the NRLA
- Boost the funding for Discretionary Housing Payments (DHPs), and tweak the way they are set up and administered
- Increasing Universal Credit payments by £20 a week
New benefit claimants see incomes fall
A new report claims that 43% of benefit claimants who were not in receipt of benefits prior to the Covid-19 pandemic have seen their household incomes fall by a quarter.
The Resolution Foundation has published a report focussed on the impact that the coronavirus pandemic has had on incomes, savings and spending. It says:
“Although some benefit entitlements were increased in April this year (with an extra £20 per week uplift for each family unit claiming Universal Credit (UC), and more generous assistance for private renters with their housing costs, for example), benefits are only a partial substitute for lost earnings.”
It goes on to say:
“Households that were not in receipt of benefits prior to the pandemic that have claimed subsequently have seen their incomes drop dramatically in recent months, with more than four-in-ten (43%) adults saying they have experienced a fall in household income of more than a quarter. In contrast, a smaller (although not trivial) 9% of those who were already on low enough incomes to be eligible for benefit support before the pandemic have witnessed a large fall in their incomes, and critically from a lower starting point than those who were not in receipt of benefit support to begin.”
