The Chartered Institute of Housing (CIH) has published a plan to avoid a spike in evictions when temporary Coronavirus protections for renters end.
Working with barrister Liz Davies, CIH Cymru has developed a detailed set of proposals to avoid a crisis that could leave thousands homeless and cost landlords and local authorities millions.
These include:
- Evictions – temporary protection. Ban to be extended until evictions can take place safely and the pre-action protocol is in place.
- Evictions – post-Covid. Ensure that Welsh Parliament approval of Renting Homes (Amendment) (Wales) Bill remains a priority in order to provide more secure tenancies.
- Arrears payments. Require that payment plans for Covid-related arrears will not result in eviction provided the tenant agrees with and complies with the plan over a timescale of up to two years.
- Reforms to universal credit. End five-week wait; temporary suspension of the benefit cap and the two-child limit; increase LHA to 50th percentile of rents for a limited period; end ‘shared accommodation rate’ for under 35s.
- Rent arrears outside scope of UC. Increase emergency fund for discretionary housing payments and ensure they are more widely available; tenants to be able to repay arrears over two years – no eviction possible if comply with repayment plan.
- No access to UC because of immigration status. One-year lifting of ‘no recourse to public funds’ and other restrictions on claiming benefits.
- Landlords’ loss of rental income. Similar interest-free loan scheme to that proposed in Scotland; landlords given mortgage holidays on rented properties to pass relief onto tenants.
- Local authorities and housing associations lose rent income. Consider one-off payments to stabilise landlord accounts where the can be shown to be needed.
- Housing Support Grant – A key part of preventing homelessness and evictions is through services such as those funded by Housing Support Grant which should continue to be protected in future budgets and provision made for further emergency injection of funds.
National director of CIH Cymru Matt Dicks said:
‘For the 350,000 who are tenants of private or social landlords in Wales, a key part of the hardship and suffering during the crisis has been the struggle to pay their rent and worrying if they will be able to keep their home. If our society and the economy are to recover from the crisis, it is vital that these fears are allayed quickly and thoroughly.
‘We do not start from a good place. Local authorities’ and social landlords’ resources for dealing with homelessness were stretched before the epidemic and could be overwhelmed if there is a sudden growth in evictions due to rent arrears.’
According to Citizens Advice Cymru:
- Around 250,000 people in Wales (17% of the total workforce) have already seen their hours cut, been laid off, or made redundant as a result of the Coronavirus outbreak
- Four out of 10 (42%) people have lost household income because of this crisis, with nearly one in 14 (7%) losing 80% or more of their household income
- One in four people (25 %) have applied or expect to apply for benefits as a result of the coronavirus outbreak.
Meanwhile Universal Credit claims have increased substantially in Wales. In March claims rose from around 9,000 households a day to a peak of 75,000 a day before failing again but by the end of April claims were still running at around 21,000 new households per day
The furlough scheme helps to sustain incomes but has a shortfall of 20 per cent if not made good by employers. When the scheme ends people may lose their jobs, have lower earnings than before or have used up their savings.
Protection against eviction currently ends in June. Even if it is extended, landlords are still able to start the eviction process if arrears accrue, resulting in a potentially massive number of eviction actions within a short period.
Matt Dicks said:
‘The burden cannot simply be put onto landlords. That could lead to defaults on mortgages and enforced sales, which could deplete the sector just when that capacity is most needed. This needs government action too.’
Gavin Smart, chief executive of CIH, added:
‘While the measures put in place by government and landlords are helping millions of people during this awful time, we have to think about what comes next. Simply ending all these measures without a plan to cope with the arrears built up through the outbreak risks pushing families into homelessness and landlords into bankruptcy, just at a time when a stable housing sector is needed to help rebuild our economy.
‘Our proposals are practical and proportionate to the threat facing millions of people. We look forward to working with the government across the UK to make them part of our national post-COVID recovery plan.’
Read the CIH plan to prevent evictions here.