Tenants call for ban on rent increases as financial pressure mounts

Linda J. Dodson

Tenants have called on the Government to give them greater protections after a report warned about the dire financial outlook for those living in rented accommodation.

Analysis published by the Resolution Foundation, a think tank, found that renters were much more likely to be financially harmed by the coronavirus outbreak. This is because tenants disproportionately work in sectors that have been affected by the lockdown, such as hospitality, travel and non-food retail.

Employees in these industries are unlikely to be able to work from home, the report said, putting further strain on their finances.

Generation Rent, a campaign group that represents tenants, has called for all rent increases for sitting tenants to be banned.

While most tenants have already paid their rent for April, financial pressures will increase as the months go on. The Resolution Foundation warned that renters typically spend 31pc of their income on housing costs, compared to 13pc for homeowners.

Caitlin Wilkinson, of Generation Rent, said some renters had successfully agreed with their landlord to defer or reduce rent payments. However she was also aware of cases where landlords had tried to increase rents. 

“It seems to be a complete lottery,” she said. “We’ve heard from renters who have lost jobs and had rent reductions denied. A supporter contacted us last week to tell us their landlord was increasing the rent by more than 10pc.”

Ms Wilkinson feared that some property owners were asking their bank for a mortgage payment holiday but were not passing this break onto renters. She said: “It seems possible for unscrupulous landlords to apply for a holiday and not inform the tenants.”

The Government has so far rejected calls for additional help for renters, encouraging tenants to claim housing benefit if they are struggling. However many are not able to make a claim because they fall outside the current eligibility rules.

Instead, renters who are saving for a home have been asked to dig into their savings which would otherwise be used for a property deposit. Draining these savings could potentially push their dreams of home ownership back by years. 

Lindsay Judge, of the Resolution Foundation, said: “While many homeowners are relatively well-protected in the current crisis via low interest rates and mortgage holiday options, private renters are exposed to rent arrears and even evictions should they lose their jobs.”

The National Residential Landlords Association, which represents property investors, has warned about the financial impact on landlords. It said that many tenants were under the false impression they no longer have to pay rent as a result of the pandemic. It wants the government to promote better its guidance for those in rented accommodation.

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