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Beyond Short-Termism: How to Fix the Covid-19 Renters Crisis

Resolution Foundation report demonstrates the inadequacy of the Government’s response to the renters crisis – it must go beyond its own short-termism, writes Jack Shaw.

In March the Government said that this pandemic was an opportunity to end rough sleeping for good. New research by the Resolution Foundation has made it clear that that won’t be the case unless the Government is willing to put protecting renters and tackling homelessness at the top of its domestic agenda – and it can only do so by legislating. 

At the end of October the Resolution Foundation published its report Coping with Housing Costs, Six Months On, based on a survey in September of 6,000 working-age adults across the country. This follows the same survey carried out in May, and provides a unique opportunity to view the pandemic through the lens of housing.  The findings are stark, if not all too familiar.

The basic tenet is that the safety net put in place at the beginning of the pandemic for private and social renters, as well as homeowners with mortgages, falls short of the support required to keep people from losing their homes. 

Comparisons between tenures show that, across multiple indices, renters are hit harder. Compared to homeowners with mortgages, renters – social and private – are more likely to have lost their job or been furloughed; be in arrears; cut back on other items, dip into savings or borrow to cover housing costs; be in receipt of Housing Benefit and Universal Credit; and be less certain about where they’re going to live in 12 months’ time.

Over time the need for homeowners with mortgages to draw on mortgage holidays has fallen, while their job certainty appears to have increased – only three per cent of people with mortgages reported job losses, compared with eight per cent in the private rented sector and seven per cent in the social rented sector respectively. 

It does not appear that the need for housing support for renters has receded as much as we had hoped over the same period. Fewer renters reported being on furlough in September compared to May – perhaps because some have returned to work – but more reported losing their job.

Likewise, the number of renters seeking – and being refused – rent reductions has remained relatively stable at around one in 20. The picture is nuanced, but there are several conclusions that can be drawn.  

First, the blow to households with mortgages has been softer during this pandemic. Second, not only have renters been hit harder, but they have also recovered more slowly. Third, the interventions put in place by the Government aren’t sufficient. At best, they delay homelessness, not prevent it. True, renters have benefitted from a ban on evictions, and an uplift in Local Housing Allowance (LHA) rates and Universal Credit (UC), but none of these are long-lasting.

The LHA rate rise itself follows a capricious rate freeze by the Government in 2016, which decoupled it from inflation. What that means is as inflation rises, LHA rates do not rise with it. This gives renters access to fewer and fewer properties, which has undoubtedly undermined the resilience of private renters who benefit from LHA during this pandemic. 

The uplift essentially returns LHA rates to pre-2016 levels, although in another blow the Spending Review has since revealed that LHA rates will be frozen in cash terms from next year – so rates will once again fall back below 30th percentile over time, pushing renters back to square one just as they’re running out of cash. The ban on evictions has already ended, and the UC uplift is due to end in April.

As the Government battles on every front – COVID, saving the economy, protecting public health, Brexit, a credible Opposition – I suspect the Secretary of State for Work and Pensions’ latest words in Parliament are more than a Freudian slip: they were by design.

On 30 November, when asked whether she would make the Universal Credit uplift permanent, Dr Thérèse Coffey pointed out to Parliament that “we can also make the effort to encourage people to go for vacancies.” With the number of vacancies down 35% this time last year notwithstanding, such nonsense in the face of evidence-based interventions that will support renters to hold onto their tenancy is the epitome of absurdity.

But do not take my word for it. Modelling by the Joseph Rowntree highlighted that up to 16 million people across several million households are at risk of losing the equivalent to £1,040 overnight if the UC uplift ends in April, a kick in the teeth for the lowest income families just as they’re recovering from the pandemic. Research from Shelter earlier this year also revealed that 322,000 renters were in arrears despite keeping up with their rent before the pandemic began. With landlords handing out notices of repossession, we are only months away from understanding the full impact inadequate support has had on renters.

So, where does that leave us? Above all, it leaves us angry – or at least it should do. As to where it leads us: to the Government’s front door. The safety net is holding – just – in the face of the pandemic. While it cannot be the solution for renters forever, for now it’s making a global pandemic more bearable.

Though the Government cannot even get short-termism right, it already needs to look long-term too, and that starts with taking control over the domestic agenda and legislating as it has promised. Ministers need to get on with the job and abolish Section 21 of the 1988 Housing Act – so called ‘no fault’ evictions which allow landlords to evict tenants without good reason – over 18 months since the promise was made.

The Government also needs to bring forward the Renters Reform Bill, which no doubt should have precedence over some of the smaller items on the legislative agenda, such as the licensing of jet skis last month. If, as the Bill says, its aim is to improve the “security for tenants in the rental sector, delivering greater protection for tenants and empowering them to hold their landlord to account”, then surely the best time is now, before that security all but evaporates?

The cost of renting has long outstripped people’s ability to pay rent. The Government should strengthen and lengthen interventions to support those most in need, but it should also abandon its short-termism and support existing interventions with legislation that looks toward the long-term. A failure to do so will force more renters out of secure, permanent accommodation, and into temporary bed and breakfasts.

<strong><span class="has-inline-color has-accent-color">Jack Shaw</span></strong>
Jack Shaw

Jack is a Senior Policy Researcher for a Labour MP, has previously worked for the Local Government Association, and is a member of the London Labour Housing Group Executive Committee.

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Post-Covid crisis how should the Private Rented Sector change?

The Covid crisis exposes weaknesses at the heart of our housing system. The emergency ‘all in’ policy for rough sleepers, temporary eviction ban, lifting of Local Housing Allowance rates are all life-saving measures.  But we should all be ashamed that our housing system is so broken that such interventions were needed.  

Access to a safe, secure and affordable home is no longer available to hundreds of thousands of children and their families.  Our whole housing system has to change and alongside national investment in genuinely affordable homes, major reforms to the private rented sector must be a core part of that change. 

Labour Housing Group Patron Karen Buck MP, has done outstanding work on improving rights for renters, including bringing forward the Homes for Human Habitation Act in 2019.  Labour needs to campaign for a private rented sector where renters pay a fair rent, are treated decently by their landlord, get their repairs done on time and can put down roots in a community. 

There is hope that this is a moment to reflect on the powerful impact that our housing situation has on our health and inequalities in our housing system but this Tory Government is not bringing forward the legislation needed. For a decent and fair recovery, where no-one is left behind, we need urgent measures to keep renters safe and a programme of long-term reforms.

Renters need secure homes – this is better for them and for economic recovery.  It is a huge relief for renters that the eviction ban has been extended to the end of August but there is so much more to do.  Following years of collective action, the Government has scheduled the Renters Reform Bill, but we must continue to press them and our representatives in Parliament to make sure that it is debated and enacted as soon as possible.  The sooner that Section 21 ends, the sooner that tenants can feel secure in putting down roots in their community.

Private renters have very few rights to information about their landlord or new home.  It is not right that renters cannot check whether landlords have met certain standards.  Mayor Sadiq Khan’s blue print for renters in London sets out how we can improve access to information for renters and we should campaign for devolution to local and regional authorities to establish accountability locally for landlords.  For Labour activists, preparing for local elections in May 2021 will be a key moment to speak to private renters, listen to their experiences and work on local policies to support private renters.

As a local Councillor, I know just how hard it is to use the legislation available so that repairs are done on time, homes are properly maintained and renters are treated decently.  The powers to take action on these issues rest mostly with local authorities who have endured a decade now of funding cuts.  For a fully functioning private rented sector, which works for renters, landlords and the economy, we need a transparent and standardised funding settlement for local authority enforcement services.

The connection between housing and health was cemented in public policy nearly 150 years ago in 1885 in the Royal Commission on the Housing of Working Classes.  This relationship was maintained when Nye Bevan became the Minister for Health and Housing in 1945.  The Covid crisis reminds us just how linked our health is to our housing. We cannot afford to wait another 75 years before this connection is renewed in policy. 

Many renters report not just a detrimental impact of insecure housing on their physical health but also a strain on their mental health.  Not only are some of our most vulnerable households living in insecure homes but many of the key-workers who care for us, feed us and nurse us are spending their already low wages on private rented homes with very few rights.  We urgently need transformation of the private rented sector, for a recovery that leaves no-one behind.

<strong><span class="has-inline-color has-accent-color">Rachel Blake</span></strong>
Rachel Blake

Rachel is the Deputy Mayor for the London Borough of Tower Hamlets. She was elected to represent the Labour Party for Bow East Ward in May 2014 and appointed to Cabinet in July 2015.

Rachel has held Cabinet Member roles for Regeneration, Planning, and Air Quality. Rachel is now the Cabinet Member for Adults, Health and Well-being.

She has previously been called in as an expert witness to the Housing, Communities and Local Government Committee on its inquiry into the long-term delivery of social and affordable rented housing.