The Government's steps are welcome, but it must go further to ensure people can stay at home and stay afloat.
At a time when we are being asked to stay at home, it is vital that we take steps to ensure people across our society affected by the economic consequences of coronavirus are secure in their homes.
The labour market consequences of COVID-19 are likely to have a serious impact on the ability of households to meet their housing costs in the following months, with potentially systemic consequences for renters, landlords, lenders and the wider housing market if this support is not sufficient.
People will likely feel backed into a corner, stressed and anxious about keeping a roof over their head.
It is welcome to see renters getting real protection from eviction
It is therefore welcome that the Government has taken positive, just steps in this area, introducing a mortgage holiday for three months and banning all evictions.
In our briefing yesterday JRF were critical of the Government's proposals to ban evictions, arguing that in only applying to new claims they were excluding those already subject to possession proceedings, who would not be protected. Last night the Government announced that the court service will suspend all ongoing housing possession action – this means that neither cases currently in the system, or about to enter it, can progress to the stage where someone could be evicted.
This is welcome news. It can’t be right that anyone would be made homeless during this global pandemic, forced to look for new housing or to be placed in inappropriate temporary accommodation, against public health advice. This, alongside the three-month mortgage holiday, will provide much needed breathing space for families, ensuring they are not worrying about losing their homes.
Help with housing costs could be a lifeline
To be most effective the ban on evictions and the mortgage holiday need to be supported by greater support for housing costs through the social security system.
First, the Government should ensure that Local Housing Allowance is set at a level that will support those who see their incomes fall as a result of the coronavirus. While increasing Local Housing Allowance (LHA) rates to cover the bottom 30% of local rents is a welcome step in ensuring Housing Benefit has some relation to local rents, it will still leave a large amount of renters paying housing costs which are far higher than the support available. To overcome this the Government should:
- Temporarily increase LHA so that it covers median rents.
- Lift the national cap on the amount of LHA which can be paid so that it does not constrain rents in high-cost areas.
Secondly, mortgage holders need support too. While the three-month mortgage holiday will help many, more can be done to support households who will continue to face financial impacts after this initial breathing space. Currently the support for mortgage costs through the social security system is limited when compared to the support available for renters. At a time when many homeowners will be concerned about meeting their housing costs, the Government should look to reduce the wait times to be eligible for Support for Mortgage Interest (SMI) to immediately after the three-month holiday period.
Government has taken welcome steps in considering housing, but there is more it can do if it is to ensure these measures work as intended and enable people to stay at home and stay afloat.