Most of us have never lived through more precarious times than those we are currently experiencing. The fact this health emergency is still taking us by surprise every day is testament to how big the changes have been. But when facing these challenges, we need to be aware that our first answer may not always be an adequate response to what we are facing.
Right now, we’re hearing from people every day who have lost work or been made redundant, unsure how they’ll manage to pay their rent and stay in their homes. The official figures reflect this – almost a million people have registered for Universal Credit (UC) in the last two weeks. That’s 10 times more than the norm, and no doubt there are more to come. People who have never before needed the safety net of the social security system need it now, which means it needs to be broad enough to support them. Given the huge impact of the outbreak of coronavirus (COVID-19), it’s now clear that government must make more support available. We need housing benefit for private renters, or Local Housing Allowance (LHA), to cover the average rents if we are to ensure families can stay afloat.
In terms of the impact on the people we at Shelter are here to help, the immediate challenge of coronavirus causes two sets of issues. Firstly, the risks it poses to the health of those whose housing or lack thereof does not allow them to stay safe. And secondly, the actions taken to protect all our health leaves some at the risk of losing the security of their home. We are keeping our advice pages up to date to help people know how best to do this for themselves, but there is a real need for government to be adaptable enough to provide the necessary support when those needs emerge.
We need government to be responsive to new challenges and that’s why they must go further to extend the social security system. The government’s advice has been clear – we must stay at home. But doing so is made difficult if your home is suddenly completely unaffordable.
The plan so far
The Chancellor was prompt in restoring LHA to cover the cheapest 30% of market rents (or the 30th percentile) when the extent of the outbreak emerged, and huge efforts are being made by the Department for Work and Pensions to ensure those who now need help can get it. However, LHA rates should have always covered the 30th percentile. It was a long line of cuts and freezes since 2011 that meant the LHA rates stood below the market rents at the 30th percentile in 97% of England. While restoring to this level was very welcome, it is the level we needed before this outbreak, not during.
It’s clear that we’re now seeing a new group of people needing to claim housing benefit for the first time. Average rents are way above the 30th percentile, meaning many who now claim benefits because they’ve lost their job or income are paying much higher rents than their housing benefit can cover. For example, in Cambridge, a single parent with one child receives £1,492 a month in UC, but an average rent is £1,250, leaving them an impossible £56 a week for heating, food and all their bills. In Oxford, average rents are £1,250 and UC is £1,554, leaving just £70 a week. In Lambeth an average rent is £1,650 and UC is £1,992, leaving just £79 a week for all other bills.
A better solution for renters
A restoration to what was needed before this health emergency is inadequate in these extraordinary times. Many of the people now registering for UC are living in homes they can afford to rent in normal circumstances, but that they cannot hope to afford when relying on UC. They face either coming out of this crisis in huge amounts of debt and at risk of eviction once the lockdown is over or deciding to avoid that debt by leaving their home now and risking their health and that of others.
That’s why we need the government to rethink their approach and lift housing benefit to cover the average cost of renting a home in every area – taking it to the 50th percentile – to help people through the crisis.
And we need to remove the wait people have to get it. Currently, those making new claims to Universal Credit (UC), which is how people would apply to receive LHA, have to wait five weeks before they receive their first payment. They can take out an advance payment as soon as they apply, but this is government debt that is deducted from their payment at a very high rate.
We have already seen how the impact of government’s action has needed revisiting or rethinking as this crisis has developed. We saw a very welcome commitment from government to ending evictions for this period but when we saw the detail, it was clear their initial approach didn’t do the job. It is to their credit that they listened and took our advice to go further and halt court proceedings to ensure evictions could not go ahead. The government has been right to live by Keynes’ approach: ‘When the facts change, I change my mind.’ Similarly, we now need government to revisit its answer on LHA so we can be confident many more families can afford to stay in their homes.
If there is something consistent in the issues we’ve seen, it is that we are all finding our way through this crisis. The government is adjusting and finding its way too. Our politicians, from Secretary of State for Work and Pensions Thérèse Coffey, to Housing Secretary Robert Jenrick, and the Chancellor Rishi Sunak, have been working incredibly hard to respond to each new challenge. We are now asking them to respond to the mounting job losses and spiralling debt by going further to help people pay their rent.
There are no sides to this fight except all of us fighting together against this awful virus. It’s clear that if we are to get through this, the wisest course for ministers is to acknowledge they may not have the perfect answer first time, and be ready to change course.
Please join us in calling on the government to help those struggling to pay their rent during the coronavirus crisis.