450,000 families fall behind on housing payments in pandemic

Around 450,000 families have fallen into arrears with their housing payments during the Covid-19 crisis, according to a new report.

The report by the Resolution Foundation estimates that more than 750,000 families were behind on their housing costs in January, an increase of around 450,000 compared to pre-pandemic levels, and that renters have been hit hardest.

Around 300,000 of the total number of families in arrears also include dependent children, suggesting they are especially vulnerable.

The report notes almost a quarter (24%) of private renters have seen their earnings fall during Covid-19 crisis, compared to one-in-six (16%) working age adults with a mortgage.

Another factor is that over the course of the pandemic, one-in-ten (10%) of families with a mortgage have received a mortgage holiday from their provider, giving them some much-needed respite.

But just 3% of private renters and 2% of social renters successfully negotiated rent reductions over the pandemic period.

The government has provided support for renters through a temporary boost to Local Housing Allowance introduced last April, and Discretionary Housing Payments (DHP).

However, the report shows that DHPs are not reaching a large number of those with arrears. More than half of private renter families with arrears are not currently in receipt of Universal Credit or Housing Benefit, and are therefore ineligible for payments.

The report argues the government should introduce pre-emptive measures to help those most at risk from rent arrears.

‘The UK is currently experiencing a mounting arrears crisis, with more than 450,000 families having fallen behind on housing payments as a result of the pandemic,’ said research director, Lindsay Judge.

‘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.

‘This situation will worsen without significant government intervention. Ministers must take action by boosting the DHP system, and introducing a UK-wide tenant loan system, to ease the pressure on tenants, landlords and the courts.’

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