More than 750,000 families are currently in arrears with their housing payments, with 450,000 struggling directly because of Covid-19, according to new research from Resolution Foundation.
The independent think tank is warning that without further government intervention, the arrears crisis will worsen in the months ahead.
The National Residential Landlords Association (NRLA) said landlords have shown flexibility during the pandemic, and can offer a range of options to tenants such as rent-free periods, deferred payments, or reduced rents. The trade body is calling for government-guaranteed interest free loans to help the situation, administered by a third party, such as a bank or building society.
Meera Chindooroy, deputy director of policy of the NRLA, said: “We welcome the new report which agrees with the need for tenant hardship loans to tackle the rent debt crisis we now face. Simply banning repossessions is doing nothing to address this underlying problem which renters and landlords are struggling to cope with.
“The chancellor needs to develop an urgent financial package, as called for by the Resolution Foundation, to pay off arrears built since lockdown measures started last year. Only this will sustain tenancies and prevent renters facing the consequences of damaged credit scores.”
Lindsay Judge, research director at the Resolution Foundation, said: “Renters have been particularly badly hit. Many have taken huge hits to their earnings and have limited savings to fall back on. To make matters worse, measures that could ease the pressure, such as discretionary housing payments from local authorities and negotiated rent reductions from landlords, are not getting through to those that need them.”
Looking closely at the impact of Covid-19, a study conducted by the Financial Conduct Authority recently revealed that the BAME, young adult and self-employed populations appear to be the worst affected by the pandemic.