People excluded from the Government’s coronavirus support schemes are being forced to sell their properties to raise cash in order to survive financially after being left without income for almost five months.
House buying firms have reported a surge in inquiries from people struggling to make ends meet amid the Covid-19 pandemic. Many are looking to free up cash with quick sales – even if it means they get less than the property is worth.
Mortgage holidays are still in place, with almost two million people taking advantage of payment breaks, but others urgently need cash to see them through.
At least a million people who fell through the cracks of the coronavirus furlough scheme and self-employed income support programme had been holding out for some form of concession that would mean they would be covered. Last week, however, Rishi Sunak, the Chancellor, wrote to MPs who had called for extra protection for those who had been left out to say he would not be making any changes to the schemes, which were already costing taxpayers tens of billions of pounds. The Treasury Select Committee, an influential group of MPs that scrutinises the Treasury, accused the Chancellor of turning his back on those who were struggling to get by.
Mr Sunak’s decision marked a watershed moment for Rizia Robertson, 62, from Edinburgh, who ran a B&B for the homeless in the city. Her contract with the council came to an end during lockdown and was not renewed, meaning her income was suddenly cut off.
She has put her business property, which is also her home, on the market as she can no longer afford to pay the mortgage and needs to pay off other business loans. She qualified for a self-employed grant but did not get the business grant funding she was hoping for.
“I’m selling up after 12 years and, after I have cleared my debts, I don’t think I will have enough left over to buy myself a place to live. So, ironically, it will be me declaring myself homeless,” she said.
Raymond Moore of Housebuyers4u, a home buying firm, said his business had seen a 25pc increase in the number of people inquiring about selling their property to the company.
He added that the firm had received around 400 calls a month over the last two months of lockdown from prospective sellers, with a quarter of inquiries relating directly to people struggling to meet their normal living costs because of the Covid-19 crisis.
One 32-year-old television industry freelancer from Cornwall, who asked not to be named, said she had put her London flat, her second home, on the market. “I’m pregnant and have been out of work since the pandemic began. My partner is also self-employed and has not been able to work either. We are both PAYE freelancers so don’t qualify for furlough or self-employed support,” she said.
“The flat is my pension, which I was hoping to leave as a long-term investment for my retirement. Selling it was not part of the plan. But I am not going to be able to work for a number of years after I have my baby and will only have statutory maternity pay to get by on, so I need some cash in the bank.”
Statutory maternity pay is a maximum of £151.20 a week for 39 weeks. She said there had been little interest in the flat, which she had listed for £285,000.
“It’s a first-time buyer sort of place and few people are in a good position to buy right now,” she said.
Martin Lewis of Money Saving Expert, who campaigned alongside MPs for extensions to the state support schemes, said the cracks in the programmes had turned into fissures.
“Many are without help, including those who’ve changed jobs, started a business in the past 18 months, are on freelance PAYE, are limited company directors, work for agencies, are shielding or just had employers who didn’t care. And it’s the practical even more than the principle that counts. Many of the unsupported millions are financially desperate, with huge knock-on impacts on their mental health,” he said.
The Government has said its support system is among the most generous in the world and that other help, including easier access to Universal Credit and other benefits, as well as credit payment holidays, is also available. Almost 10 million people have been furloughed, at a cost that now exceeds £30bn. Almost three million self-employed people have asked for income support to the tune of nearly £8bn.
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