Where Now for the Private Rented Sector?

Key findings

No. of

people in rent arrears could triple in next 12 months

700,000

tenants and landlords could be affected

This short analysis from the London School of Economics estimates the possible impact on the private rented sector of Covid-19 and rising unemployment; looking at the scale of the current problem, the immediate and longer-term consequences for evictions and homelessness, and potential solutions.

Key findings

  • Spikes in evictions are highly unlikely. Rather there will be a slow burn that will go on at least into 2022. Formal evictions, while potentially much higher than in the past, are likely to be a small part of the story.
  • Tenants are more likely to find somewhere cheaper to live – often, among younger people, going back to Mum and Dad or sharing in overcrowded and insecure conditions.
  • But the longer tenants remain in accommodation where they can’t pay the rent, the higher their future debts will be.
  • Local authorities can help mainly through their prevention powers and through (currently under-used) Discretionary Housing Payments.
  • Reasonable estimates suggest that there could be at least three times the numbers of formal evictions than before COVID-19, leading to an additional 30,000 more households in temporary accommodation.
  • Even if we return to some sort of normality by the end of next year, the long-term arrears and loss of credit-worthiness among tenants, and loss of income and confidence for landlords, will continue to scar both individuals and the private rented sector for years.
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Where Now for the Private Rented Sector?

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