Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
About 3 weeks ago 46
Damien Gayle at The Guardian reports this morning that “Activists urge Tenants hit by Corona Virus Crisis to stop paying Rent” Click here
I have just sent this reply:
I read your article with interest as I am a small landlord currently coping with the Corona Virus outbreak impact on my business and my tenants and have been helping several tenants to explore their options with government support at this very difficult time.
Some statements in your article and that of the New Economics Foundation report (which I subsequently also read) did not make sense to me and so I wish to query and reply.
From your article: “Earlier this month, analysis by the New Economics Foundation thinktank showed that 1.2 million private renters in the UK will fall through the cracks in government schemes to help workers who have lost income, and face scraping a living on benefits.”
Whilst I understand that there may be many people who are not able to apply for the new government support schemes, it is my understanding that all those who don’t will be eligible to receive Universal Credit which whilst not new is also a “government support scheme”. Your description of these remainder facing “scraping a living on benefits”, whilst emotive, is not exactly examining the reality and detail of the support that is available. And in the wider context of your article regarding ability to pay rent it is avoiding an extremely relevant detail.
It is the experience of two of my tenants, (who fall in to exactly this category losing their income due to the corona virus outbreak and unable to apply for furlough or SEISS) that they were both able to apply to Universal Credit and within four weeks were awarded not only an amount for “Living costs” but also a clear and separate award for “Housing costs”. In both cases they were awarded the full amount of their rent and were able to forward this to prevent further arrears. In one case the amount of Housing costs award that they were eligible to receive was actually 3 times higher than the amount they needed. As a single person under 25 renting a bedroom in a shared property in the North London area they could have received up to £295 per week for rent alone.
From the linked NEF report: “Those who lose work and cannot rely on government support schemes will have to fall back onto universal credit (UC). But support from universal credit is also weaker for many of these disadvantaged groups. The main payment for under-25s is set at just under £79/week”.
This report also completely fails to mention the separate award from Universal Credit for housing costs. The “main payment” of £79 per week is the award for living costs and does not include the separate amount for housing costs which as I said above could be as much as £295 per week.
In the context of both these statements from your article and the NEF report both have avoided mentioning that Universal Credit includes a separate and specific amount awarded for rent therefore securing the applicants accommodation. Whether the “main payment” awarded for living costs is adequate is the subject of an entirely different argument but whilst Universal Credit is independently assessing need for rent and providing substantial assistance specifically for rent it cannot be used as an argument.
If a tenant receiving benefits falls into arrears of more than two months the landlord can apply to Universal Credit to have the amount awarded for housing costs paid directly to them and any arrears are subsequently recovered with small deductions from future living costs amounts. Therefore advising such tenants to withhold any amounts awarded for housing costs as a plan of “robbing Peter to pay Paul” could not be a real solution.
Put simply if the estimated 1.2 million people who were “falling through the cracks” applied for Universal Credit and subsequently withheld rent they would only be able to do so for around two months. So how can this move anything forwards?
Whether my tenants are “scraping by” on the amount awarded to them for their “living costs” is an argument with which I would be willing to engage but “scraping by” on the amount for “housing costs” is simply not the case and the whole issue of paying rent seems to be being hijacked in at best a fuzzy thinking way which simply wouldn’t work, and at worst deliberately in order to serve a completely different agenda of which I am not entirely sure but I think the Guardian could examine in it’s unbiased way.
I would urge any tenants who are struggling to talk to their landlords in the first instance and to keep open and honest communication and find a way forward together.
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