Posts with tag: The Big Issue Ride Out Recession Alliance

UK renters could be pushed into poverty by government benefit cuts

A joint statement warning about the impact the UK Government’s benefit cuts could have on renters has been released this week.

The Big Issue Ride Out Recession Alliance, Crisis, The Mortgage Works, Nationwide Building Society, the National Residential Landlords Association (NRLA), Propertymark, StepChange Debt Charity, and Shelter have together released this statement:

The UK Government must complete and publish a full assessment of the impact on renters of their decisions to freeze Local Housing Allowance and cut Universal Credit, which risk pushing many households into poverty, problem debt, and homelessness.

In the wake of the pandemic, we saw bold and swift action from the Government to prevent a housing debt crisis including restoring Local Housing Allowance rates to the 30th percentile of market rents and increasing the Universal Credit Personal Allowance.

With the economic impact of the pandemic increasing the financial strain on families, across the country the number of private rented households in receipt of the housing element of Universal Credit increased by 107% between February 2020 and February 2021. Over 55% of these households have a shortfall between the housing support they receive and the rent they have to pay. 

The UK Government has confirmed that where such shortfalls exist, the median amount is £100 a month. This points to a need for continued support for families and individuals to cover the cost of rents. Yet since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week. 

Whilst the Institute for Fiscal Studies has described changes to Local Housing Allowance as “arbitrary and unfair” we have seen no assessment from the UK Government of the impact either of these policies will have on the capacity of recipients to cover rent payments. 

As organisations representing landlords, letting agents, tenants, people facing homelessness, and debt advice services, we are united in calling on the UK Government to complete and publish a full assessment of the impact of both of these policies on the ability of renters to meet their housing costs.

We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance. To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.

Chancellor called on to tackle the UK rent debt crisis

A joint statement has been made by The Big Issue Ride Out Recession Alliance, Crisis, Citizens Advice, Joseph Rowntree Foundation, Money Advice Trust, The Mortgage Works, National Residential Landlords Association, Nationwide Building Society, Propertymark, StepChange Debt Charity, and Shelter.

The statement calls on the Chancellor to take action in order to tackle the rent debt crisis:

“At least half a million private renters are in arrears due to the economic impact of COVID-19. The UK Government’s own research shows that ‘private renters report being hardest hit by the pandemic’.

“Renters and landlords whose finances have been affected since lockdown cannot keep tenancies going without additional financial support.

“We welcome many of the measures taken to date, which have helped to sustain tenancies in the short term. But they do not go far enough to adequately protect renters going forward.

“The longer the Chancellor waits to take action, the more rent debts will increase, and the greater the risk of homelessness will become. Without additional support, more renters will lose their homes in the coming months, with the risk of an increase in homelessness.

“As organisations with the aim of sustaining tenancies wherever possible we consider that this requires two things in the forthcoming Budget.

“First, a targeted financial package to help renters pay off arrears built since lockdown measures started in March last year. This will help to sustain existing tenancies and keep renters in their homes – whilst also ensuring rental debt does not risk them finding homes in the future.

“Secondly, we need a welfare system that provides renters with the security of knowing that they can afford their homes. The pandemic has shown how vital this is to providing security at a time of crisis. The Government increased Universal Credit and Housing Benefit because it recognised that the system was not doing enough to support people in the first place, yet it has chosen to freeze Housing Benefit rates again from April and is considering cutting Universal Credit at the same time. It cannot be right that these measures could be pulled away from renters during continued economic uncertainty.

“We urge the Chancellor to act now to avoid renters being scarred by debts they have no hope of clearing and a wave of people having to leave their homes in the weeks and months to come.”