Activists Urge Tenants to Stop Paying Rent

by Readers Question

12:16 PM, 15th May 2020
About 4 months ago

Activists Urge Tenants to Stop Paying Rent

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Activists Urge Tenants to Stop Paying Rent

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:

Dear Damien,

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.

Yours sincerely,
Joss Urch



Comments

Brighouse

21:39 PM, 16th May 2020
About 4 months ago

Reply to the comment left by Gary Nock at 15/05/2020 - 12:35
bang on and well said

joss URCH

20:53 PM, 17th May 2020
About 4 months ago

Reply to the comment left by Frederick Morrow-Ahmed at 15/05/2020 - 12:47
Hi Frederick, apologies this was a mistake, the actual figure is £147.29 per week and I have addressed this in my response to Damien which I am about to post. Regards
Joss

joss URCH

20:58 PM, 17th May 2020
About 4 months ago

Reply to the comment left by James in London at 15/05/2020 - 14:12
Hi James, you are correct this was a mistake and I have corrected it in my response to Damien. My main point here remains that both tenants were awarded the full amount of their rent. Regards Joss

joss URCH

21:01 PM, 17th May 2020
About 4 months ago

Reply to the comment left by steve p at 15/05/2020 - 17:49
Hi Steve, great summing up and you were spot on I am about to post Damien's response and my subsequent reply. Regards Joss

joss URCH

21:05 PM, 17th May 2020
About 4 months ago

Reply to the comment left by Smartermind at 16/05/2020 - 03:25
Hi there, yes agreed I now understand that not all those "falling through the cracks" will be eligible for Universal Credit as you describe, however my point remains that we need real information here and not this at best lazy reporting and at worst deliberately misleading article. I am about to post Damien's response and my subsequent reply. Regards Joss

joss URCH

21:09 PM, 17th May 2020
About 4 months ago

Hi everyone, this was Damien's response to my letter:

Dear Joss, 

The LHA rate for a single person in shared accommodation in London inner SW (among the country's highest broad rental market areas) is £116.91 a week. I think your tenant is confusing the rate with the one-bedroom rate, which is £295 but is not available to single people under the age of 35. 

From my own research into the cost of shared accommodation in my part of central London, £116.91 is barely enough to cover the rent in even the most modest shared houses. 

Across the country, the housing element of Universal Credit covers only the cheapest 30% of rents in any given area - and only since it was increased by the government in response to the current crisis. This is obviously going to be quite inadequate for most renters who find themselves out of work as a result of the crisis. 

Yours sincerely, 

Damien Gayle

joss URCH

21:12 PM, 17th May 2020
About 4 months ago

Dear Damien,

Thank you for your response, which immediately begs the question:

Why did you omit to mention in your article the significant portion of those applicants for Universal Credit (who are “falling through the cracks” such as my tenants) who’s rent will be FULLY met as you state that “it falls within the “lowest 30% of rents in any given area”?

Therefore the number of people actually “scraping by” with regards to rent could not be anywhere near 1.2 million.

And you have not responded to the fact that you refer your readers to an NEF report which gives the impression that under 25’s tenants applying for Universal Credit are going to have to choose whether to buy food or pay rent with the £79 per week that is in fact awarded for living costs when there is a separate and comparatively substantial award for rent.

All this is incredibly misleading.

It seems to me that the correct breakdown and information to be examined is:

A) The NEF report states that 1.2 million private renters whose income has been affected by Corona Virus are not eligible for furlough or SEISS
B) Of those, a small portion will NOT be eligible for Universal Credit either and will be in direct need of further assistance for both food and rent.
C) Of the remainder who WILL be eligible for UC, those paying the cheapest 30% of rents in any given area will have most likely have their rent met IN FULL by the housing costs award.
D) Of the remainder, whose rents are not met in full, some will receive a “discretionary housing payment” to top up (see below), and therefore will also have their rent met IN FULL
E) The remaining portion who’s rent will not be met in full and will not receive the above DHP but who WILL still have a portion met from the UC Housing costs award and therefore will have SOME arrears.

If the NEF could provide the numbers of people in these categories then we would have a true picture of the problem regarding the need for rent assistance and we could go from there.

Evidently those in category B) will be worse off than people in category E) as if they have lost the whole of their income they would then be struggling to find the whole of their rent rather those in category E) who are only needing to find the top up amount.

So what we are really talking about here is people who find themselves in category B) and E) and what are the true numbers and how can they be helped in these unfortunate circumstances?

In both cases again I would urge them again in the first instance to enter in to discussion with their landlords as to how to deal with any arrears and this could be resolved via payment plans, rent reductions etc. Many landlords I know have already reduced rents in line with what tenants can afford and written off arrears in order to support tenants therefore taking the financial “hit” themselves. Would you care to write an article about that?

If tenants and landlords engage in open and honest discussion with real information then we can find solutions and if necessary lobby the government from a unified position for any assistance needed.

Yours sincerely,
Joss Urch

Note: My apologies, you are correct, I was mistaken regarding the figure of £295.

For housing costs in Universal Credit the most a single person in shared private housing under 35 in the Inner North London BRMA is entitled to is £147.29 per week. This is the area relevant to my tenants situation.

I note that this extrapolates to £638.26 per calendar month, in an area that covers Willesden, Hampstead, Highgate and Islington.

This is my source for the information:

https://www.gov.uk/housing-and-universal-credit/renting-from-private-landlord

I also note that on the same page is the following statement:
If your housing payment does not cover all your rent
You can apply for extra help from your local council - called a ‘discretionary housing payment’.

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