Sharp rise in number of renters at risk of homelessness and debt due to the pandemic, warns debt charities

Sharp rise in number of renters at risk of homelessness and debt due to the pandemic, warns debt charities

COVID debt is putting thousands of renters at risk of eviction, according to new research by debt charity StepChange.

Around 150,000 tenants are at risk of being kicked out of their homes when lockdown restrictions are lifted due to pandemic-related debts, the charity said.

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The number of people in the UK currently in severe problem debt stands at 1.8 million, up from 1.4 million in September.

Research by StepChange found 3.7 million renters have experienced a drop in income since March 2020, at the start of the pandemic.

One fifth of renters expect it to take at least six months until they can afford all their household bills again.

As well as the threat of eviction, the charity's research found that a fifth of renters have had to go without meals or suitable clothes.

What to do if you can’t pay your rent

FOR private renters, speak to your landlord as soon as you can.

They may be able to defer your payment, or to allow you to pay a smaller amount – but they don't have to do this.

Social renters should speak to their housing association or local council.

If you've tried speaking to your housing association or landlord and they aren't being sympathetic, contact Shelter for advice and support. They'll be able to guide you about what to do next.

If you're finding it difficult to manage your payments because you're in debt, here are some tips for you to curb it:

Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money

Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs

Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker

Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)

Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them. Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay

Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.

Groups like Citizens Advice, Money Advice Trust or StepChange can also help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.

Meanwhile a third said money worries have contributed to mental health issues.

An estimated 460,000 tenants have fallen behind on their rent in the past year, with 150,000 of those expected to be evicted in the next year because they can’t afford to pay.

Over all, the charity believes the pandemic has pushed more than 19million Brits into £25billion worth of arrears on household bills.

Last year, the Housing Secretary promised that no-one should lose their home because of the coronavirus crisis.

Evictions have been banned on an off since the start of the pandemic, and the ban was recently extended until the end of May.

But even with the support, StepChange says hundreds of thousands of renters are at risk of being kicked out.

The charity is calling for emergency financial support to prevent widespread homelessness and housing insecurity as part of its Covid Debt Rescue campaign.

It also wants the eviction ban to be extended beyond June and for the government to offer interest-free loans to help renters get out of arrears. Wales already offers a similar scheme.

StepChange's CEO Phil Andrew said: “The government’s own research shows that private renters have been hardest hit by the pandemic yet there was no reference to renters in the recent budget – a real missed opportunity to do whatever it takes to help a group so disproportionately disadvantaged."

Borrowers only have two weeks to apply for lending lifeline which is offering payment holidays on credit like mortgages and car finance deals.

The government promised £3.8million for a pilot programme to stop vulnerable Brits from falling further into debt.

Thousands of Brits will be left hundreds of pounds worse off due to a housing benefit freeze set to come in next month.

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