Generation Rent has called on the government to create a ‘Covid Rent Debt Fund’ to clear rent arrears and keep half a million private renters in their homes.
As members of the House of Lords debate the government’s most recent extension of the ban on enforcing evictions, Generation Rent argues that government action has failed to address the underlying £360m of rent arrears which is putting homes at risk.
Generation Rent is calling for the Chancellor to use the Budget, which will be unveiled next month, to clear rent arrears and provide £288m to allow landlords with struggling tenants to claim up to 80% of the rent due.
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This afternoon, the House of Lords is to debate the government’s extension to what is called the “Christmas truce” which stops bailiffs from evicting tenants until 21 February except in limited circumstances.
Labour’s Lord Kennedy and Liberal Democrat Baroness Grender have tabled “motions of regret” which criticise the new regulations for reducing the arrears threshold.
This means that tenants with more than six months’ arrears are still vulnerable to eviction, and both highlight the financial challenges facing renters.
In August 2020, 36% more private renters were relying on Local Housing Allowance (LHA) to pay their rent compared to February 2020.
Generation Rent estimated that 538,000 private renter households in England were not receiving enough in LHA to cover their rent.
In January, Citizens Advice estimated that half a million private renter households were in arrears by November, owing their landlords £360m.
Legal experts have reportedly backed Generation Rent’s proposal as a proportionate way of dealing with debt that balances the interests of landlords and tenants.
Alicia Kennedy, director of Generation Rent, said: “The government’s measures to increase support through the benefits system have failed to prevent half a million households racking up rent arrears, which will be impossible to pay back even when the economy recovers.
“While most are not at immediate risk of eviction, they are still being forced to pay the price of the pandemic and face the prospect of homelessness without further action.
“To get these people back on their feet, we need Rishi Sunak to step in and clear these arrears with a Covid Rent Debt Fund.”