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Private rented sector needs roadmap out of lockdown to avoid debt crisis

31 March 2021

Repeated, last minute extensions to the ban on evictions must be replaced by a coherent exit plan to help the private rented sector emerge from lockdown, the Housing Communities and Local Government Committee has found. The Government will need to establish a system of financial support for renters who have amassed significant rent arrears during the covid-19 pandemic, and should bring forwards its preferred model for doing so as soon as practicable.

Helping tenants pay their rent arrears will be the simplest and most straightforward way to avoid evictions and help landlords receive income. The potential cost of between £200 and £300 million would prevent significant expenditure on homelessness assistance.

The report praises the efforts of all involved in ensuring the Everyone In strategy got people off the streets and into accommodation during the early months of the pandemic. However, after initial successes it had become too easy for people to fall through the gaps. Individuals with no recourse to public funds due to their immigration status were not always being given the support they needed, and the Government did not have a good enough understanding of the numbers affected due to poor data collection.

The Committee calls on the Government to clarify the legal powers of local authorities to support all rough sleepers and homeless individuals during public health crises, and provide the necessary financial support to ensure no-one falls through the gaps. It additionally calls for the Government to establish a taskforce to specifically address the impact of no recourse to public funds on homelessness, or risk failing to meet its manifesto pledge to end rough sleeping.

Chair's comment

Publishing the report, Chair of the Housing, Communities and Local Government Committee, Clive Betts MP said:

“It is just over a year since the pandemic transformed our lives. In that time the Government has done great work, alongside partners in local government, healthcare and the charity sector, to ensure that rough sleepers were kept off the streets. However, cracks are beginning to show in this strategy and people are being allowed to fall through the gaps.

“Individuals with no recourse to public funds due to their immigration status need to be helped, especially during a national health emergency. Relying on charities to step in is not good enough. The Government needs to be clear with local authorities on their responsibilities, and provide sufficient funding to support them. They should also develop as task force to consider exactly how its policies on immigration, housing and elsewhere impact on homelessness and come up with solutions to address them. They have set a target of ending rough sleeping by 2024. We will hold them to this standard.

“The ongoing crisis of rent arrears in the private rented sector is deeply concerning. The economic consequences of the pandemic could be long-lasting and become even more severe. The ban on evictions has ensured that people remain in their homes for now, but the debt will continue to increase. Landlords, many of whom only own one or two properties, will also be struggling with a loss of income.

“The Government will have to find a solution that is workable for tenants and fair for landlords. The gravity of the situation means it should be treated just the same as other sectors of the economy and society that have a clear roadmap out of lockdown. Helping tenants pay their rent arrears would come at a cost, but would ultimately prevent significant expenditure on homelessness assistance further down the line.”

Main conclusions and recommendations

Everyone In

The Everyone In programme was an enormous success. The Government, alongside partners in local government, healthcare and the voluntary sector, should be praised for their efforts in the early months of the pandemic.

However, Everyone In by definition has finished as it is no longer helping all those in need of accommodation. Its central principle was that everyone, no matter their normal eligibility for homelessness assistance, would be provided with accommodation to self-isolate by their local authority. Since May 2020, some individuals with no recourse to public funds due to their immigration status have been bereft of support and reliant on assistance from charities.

The Government should return to the spirit of the early pandemic and re-commit to Everyone In. They should provide legal clarity to local authorities on their responsibilities during a public health emergency. This should include guidance stating that they can and should use their powers under the Local Government Act 1972 and NHS Act 2006 to provide accommodation for those otherwise ineligible for support. They should also provide local authorities with the funding necessary to ensure accommodation can be provided under these powers.

Tackling rough sleeping in the long-term

No recourse to public funds has been an obstacle to reducing rough sleeping long before the covid-19 pandemic. If the Government is truly serious about meeting its manifesto commitment to end rough sleeping by 2024 it must reform the no recourse to public funds policy

The Government should establish a task force to determine how policy can be adapted to address the impact of the no recourse to public funds condition on rough sleeping, to ensure those affected are supported off the streets and prevented from returning. Options that the task force should consider include:

  • abeyance while individuals in hardship are helped into the private rented sector and employment
  • placing a duty on local authorities to actively intervene and find solutions
  • helping people return to their country of origin where that is their preferred option

The task force must be more than a talking shop. The Committee would expect given the urgency of the Government's 2024 deadline that the task force should report by the end of 2021, with its policy proposal in force by 2022.

Addressing wider housing need

There has been insufficient focus on wider homelessness, including those living in cramped, poor quality temporary accommodation for long periods of time during the pandemic. The Government must ensure it addresses these less visible forms of homelessness with any increased funding.

The Government will fail in its homelessness objectives if it fails to improve on delivery of homes for social rent. This shortage is a long-term obstacle to finding suitable accommodation for people suffering homelessness and forces local authorities to spend hundreds of millions of pounds a year on temporary housing. There is equally a lack of affordable options in the private rented sector. The Committee reiterates the key conclusion from its social housing report – the Government must invest in a social housebuilding programme that delivers 90,000 social rented homes a year for the next decade.

Private rented sector

The issue of rent arrears has been a looming cliff edge for the duration of the pandemic. Having regularly extended the ban on evictions, often at the very last minute, the Government must now set out a proper exit plan for the private rented sector from national and local restrictions. It has published its roadmap for how to exit lockdown and it must equally explain how it sees the rental sector returning to business as usual. If action isn’t taken the Government is in danger of breaking its pledge that no one should lose their home as a result of the pandemic.

The Government should develop and deliver a specific financial package to support tenants to repay rent arrears caused by the covid-19 pandemic. Several options exist for how such a package could operate, including low-interest loans adopted in Scotland and Wales, and modified discretionary housing payments preferred by this Committee. The critical element will be timeliness and the Ministry of Housing, Communities and Local Government should bring forward a proposal as soon as possible.

Helping tenants pay their rent arrears is the simplest and most straightforward way to avoid evictions and help landlords receive income. The Committee received an estimate that such a rent arrears relief package could potentially cost between £200 and £300 million, however given the number of potential evictions it could prevent it would likely save significant expenditure on homelessness assistance.

Further information

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