Number in rent arrears could triple in next 12 months

There could be three times the current number of private tenants in rent arrears in England – affecting as many as 700,000 tenants and their landlords – in the next 12 months, mainly as a result of the COVID-19 pandemic, warns an analysis published today (Monday 2 November) by the London School of Economics and Political Science (LSE) and Trust for London.

These arrears could be expected to lead to at least three times the number of formal evictions as before the crisis, resulting in around 50,000 over the coming year according to Where now for the private rented sector?

However, an early spike in formal evictions is unlikely, since Government action on notice periods until March 2021 means that landlords will normally have to wait at least six months before issuing an eviction notice to regain possession. Furthermore, the Courts are putting off hearings for months – some into 2023 – meaning that evictions could be further postponed.

The analysis also points out that most arrears cases do not lead to formal legal processes and evictions. Tenants are more likely to find somewhere cheaper to live, with younger people often moving back in with their parents or sharing in overcrowded and insecure conditions. Others may find a new job and get financially back on track; others still may come to an arrangement with their landlord.

Christine Whitehead, Emeritus Professor of Housing Economics at LSE, said:

“We’re likely to see a slow burn of evictions that will go on at least into 2022. This will leave more and more tenants – and sometimes their landlords – facing months of insecurity, mental stress and hardship.”

Increases in evictions will mean that there will be far more households in need of local authority support, with perhaps 30,000 more households placed in temporary accommodation.

The researchers behind the analysis recommend that local authorities help through their homelessness prevention powers and through currently under-used Discretionary Housing Payments.

They therefore argue that the highest return would probably come from enabling people facing possible eviction to approach local authorities as quickly as possible. As part of their regular responsibilities, local authorities support large numbers of tenants to remain in, or move on to, settled accommodation, by negotiation with and sometimes incentives to landlords.

Central Government also has an important role to play through its control of benefit levels, particularly the Local Housing Allowance which sets what rents people claiming benefits – many for the first time – can afford.

Susie Dye, Grants Manager at Trust for London, said:

“The research brings into sharp relief what we already knew about the private rented sector, particularly in London but also across England. Tenants’ lack of security mean that those losing income, maybe for the first time due to COVID, are at risk of debt and losing their homes. It might not happen rapidly due to the welcome measures the Government and local authorities have taken, but stress for those affected is real. We’d love to see the Government’s promise to stop no fault evictions enacted in the Renters Rights Bill, and as recommended here, benefits and local authority homelessness prevention being strengthened, so that the system is not overwhelmed.”