Industry leaders are calling on the government to provide urgent support for young people living in private rented housing.
As the chancellor Rishi Sunak prepares to wind down the coronavirus furlough scheme, young people will be especially vulnerable to losing income and potentially their jobs, and that would, in many cases, affect their ability to pay rent.
The National Residential Landlords Association (NRLA) recently commissioned the marketing research firm, Dynata, to understand the impact that coronavirus has had on tenants in the private rented sector.
Based on the responses of 2,027 tenants in England and Wales, 24% of private renters aged 16-24 and 27% of those aged 25-34 are reliant on the Coronavirus Job Retention Scheme. This compares with around 17% of all millennials aged 19-39 according to the Resolution Foundation.
From August the scheme will begin to require employers to pay National Insurance and pension contributions whilst the government’s subsidy, currently 80% of wages, will fall to 70% in September and 60% in October.
The figures also show that young renters have taken the largest hit to their incomes of any age group.
Some 84% of 16-24 year olds and 87% of those aged 25-34 said that they had been able to pay their rents as usual, showing how reliant they are on government support to make ends meet.
Ben Beadle, chief executive of the NRLA, said: “Young renters have borne the brunt of the Covid OVID crisis. Many have relied on the furlough scheme to enable them to pay their rent. As this support reduces there is a serious danger that they will struggle to meet their payments.
“The vast majority of landlords approached for help by their tenants have responded positively and that will continue to be the case as they do all they can to sustain tenancies.
“But both tenants and landlords need the security of knowing rents can continue to be paid, just as with mortgages and rents for social housing. Plans need to be made to ensure that there will be adequate support in place to enable all tenants to continue to afford their housing costs.”
Ahead of the Coronavirus Job Retention Scheme being phased out, the NRLA together with the homeless charities Crisis and Centrepoint are calling on the government to do more to support young renters, and have made the following proposals.
Following the decision by the government to increase the Local Housing Allowance to cover the bottom 30% of rents in any given area, ministers should go further by suspending the benefit cap. The Social Security Advisory Committee has warned that the full value of the extra support already provided by the Government is not benefiting all claimants because of the benefit cap, particularly in areas with high rental costs.
Advance loans provided to Universal Credit claimants to cover the five week waiting period to receive the first payment of the Credit should be converted to grants, ending the debt that is baked into the system.
Changes should be made to the Shared Accommodation Rate (SAR) which limits the amount that those under the age of 35 can access in housing support to the cost of renting a room in a shared house. This should include immediately bringing forward plans announced in the Budget earlier this year to extend exemptions from the SAR to include rough sleepers aged 16-24, care leavers up to the age of 25, and victims of domestic abuse and human trafficking. The government should also give serious consideration to accepting the recommendations of the Social Security Advisory Committee to scrap the Shared Accommodation Rate for all under 35s.
Seyi Obakin, chief executive of youth homelessness charity Centrepoint, said: “There is now a wealth of evidence that the younger you are, the greater the economic impact of the pandemic will be. The number of young people contacting Centrepoint’s helpline has increased by almost 50 per cent since before the pandemic and our supported accommodation is stretched, but we’ve yet to see clear leadership from ministers on how they soften the negative effects.
“That is why we urgently need to see more government money to help with renting and living costs for those young people facing unemployment or reduced incomes and a better support package to help those newly out of work stay economically active. There are no simple solutions here, but business as usual is not good enough. We cannot leave young people to navigate this post-lockdown world alone.”
Jon Sparkes, Crisis chief executive, is also concerned that over the coming months we may see a wave of young people losing their homes, as government support is rolled back.
Sparkes commented: “We know that across the country thousands of young people are bracing themselves for the anxious months ahead as they struggle to pay high rents on reduced hours and low wages. This is set to become all the worse when the eviction ban comes to an end next month.
“It’s crucial that we now focus our attention on ensuring that thousands of renters get the help they need to stop them from being swept into homelessness. That’s why we’re urging the government to permanently invest in housing benefit and suspend the benefit cap, so that people can afford a safe and secure home.”