Where Now for the Private Rented Sector?
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.
- 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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