During the outbreak, the Government has introduced measures such as the furlough scheme, an extension to notice periods, a £500million financial hardship fund and an increase to Universal credit. The Government has also advised landlords and tenants to come to an agreement if rent payments cannot be maintained during the coronavirus pandemic. However, speaking to Express.co.uk, Joe Beswick from think tank The New Economics Foundation has warned the UK may soon experience a serious evictions crisis.
While homeowners have been provided with mortgage relief, which could be extended to match the current furlough scheme, there is no like for like equivalent for renters.
With many renters being on the lower end of the UK’s wage scale, Mr Beswick insisted there are many people still “falling between the gaps” under the current measures.
He said: “Our analysis suggests that a lot of those people, many of whom are private renters are going to real face real financial hardship.
“People are going to get into severe rent arrears.
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“And the Government’s current protections for renters are inadequate.”
Due to the coronavirus pandemic, the Government increased the Universal Credit allowance from £317.82 to £409.89 per month.
However, with more claiming the service after losing their job, the service was estimated to have seen almost eight million page views between March 9 and April 24, leading to the website effectively-being overwhelmed.
Coupled with the possibility claimants may have to wait five weeks to receive their first payment, many will not have enough money to cover normal day to day costs.
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Mr Beswick added: “Even as we ease out of lockdown, it’s not like people are going to suddenly bounce back into jobs.
“Large parts of the economy have been mothballed.
“And that means large numbers of jobs have been mothballed.
“If people aren’t able to afford their room and research has shown more than half of renters are struggling to pay their rent and many are missing rent payments, that debt remains due.
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“With current government policies that debt will remain and will be a legitimate reason to evict people.
“So if the Government wants to stop that from happening and stop a massive evictions and homelessness crisis, it needs to solve that problem.”
In forecasts released by the Bank of England this month, the UK economy is expected to shrink by 14 percent this year.
Unemployment in the UK is also expected to double after steadily dropping from 2011 in what many have predicted could be a larger recession than the 2008/09 financial crash.
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Mr Beswick concluded: “If we don’t solve this problem, if we don’t have to temporarily suspend the obligation to pay rent, then we’re going to create enormous financial hardship and evictions.”
In a further damning prediction for the UK economy, almost half of all UK business could run out of money according to the Office for National Statistics (ONS).
According to a survey from the ONS, 44 percent of firms who responded said their cash reserves would only last for six months.
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This came as Chancellor Rishi Sunak announced the furlough scheme will now run to October.
He did, however, add that companies will need to start to run without Government support towards the end of the scheme.
Published at Sat, 16 May 2020 06:00:00 +0000