Latest news

Today in politics: Coronavirus rent suspension call, LHA, students and homelessness

Sally Walmsley
Written by Sally Walmsley

Latest on the political reaction to widespread issues caused by coronavirus, from calls for rent breaks to support for students.

Left wing thinktank calls for rent suspension

The left leaning think tank, the New Economics Foundation, has published a report on protecting renters affected by coronavirus.

Of note it says:

  • Research it has undertaken shows that even with the government’s new measures, many renters will face severe rent arrears and financial hardship as a result of the pandemic, and “could risk losing their home.”
  • Its research shows that “of the 5.6 million workers at high risk of losing their jobs or hours as a result of social distancing measures, more than 1.2 million are living in privately rented accommodation.”
  • “Even when UC payments are received, they are likely to represent a significant income shock… And even those that are supported by the job retention system will struggle to make ends meet.”

The research concludes:

“In order to avoid plunging renters into financial hardship, and potentially triggering an eviction crisis following the pandemic, we are proposing a UK-wide suspension of rents and mortgage freeze. 

“These measures would have no significant additional cost to the government, although Bank of England loans would need to be made available for banks to cover lost liquidity from mortgage payments, and some landlords may need to rely on the job retention schemes.”

It also includes plans to support some landlords.

One of the references in the report says: “We would also propose additional income protection for landlords who rely on their rental income for basic subsistence, such as a retired adult who relies on rental payments to supplement any pension income.

“This could take the form of a monthly grant from the government, equal to the difference between a landlord’s disposable rental income and their mortgage payments (if any) up to a nominal fixed value (for example £221 per week, the value of the minimum income standard for an adult after housing costs).

“NEF has also proposed the creation of the new Minimum Income Guarantee (MIG) also at the value of the minimum income standard, which would be eligible to all working age adults. If this was implemented alongside a rent holiday, then eligibility to the MIG could be extended to all landlords (of any age group), which would supersede the need for separate government grants. 

For details of NEF’s ‘Minimum Income Guarantee’ click here.

The paper in full can be accessed here.

Boost to National LHA caps

Vicky Foxcroft MP (Labour, Lewisham Deptford) has received a response to her written question asking what recent assessment he DWP has made of the adequacy of local housing allowance rates in (a) the London Borough of Lewisham, (b) London and (c) England.

Work and Pensions Minister, Will Quince MP, said: “Local Housing Allowance (LHA) determines the maximum financial support available for renters in the private rented sector. 

“In response to COVID-19, this Department has increased LHA rates to the 30th percentile of local market rents from April for Universal Credit and Housing Benefit claimants, giving additional financial support for private renters.

“All LHA rates are now at the 30th percentile including those in the London Borough of Lewisham, with the exception of 15 LHA rates in Central and Inner London where the national maximum caps continue to apply. 

“The national caps have also been increased and are now based on the Outer London LHA rate plus 20%.”

Dr Caroline Lucas MP (Green, Brighton Pavilion) has also received a response to her written question asking if the DWP will make it policy to introduce three-month bloc payments of housing benefit to homelessness accommodation providers to reduce financial risk during the covid-19 outbreak.

Minister, Will Quince MP, responded by:

  • Reiterating that the LHA rate has increased to the 30th percentile, “giving additional financial support for private renters to support them through this period and putting an average of £600 more into people’s pockets.”
  • Noting that: “Discretionary Housing Payments can also be paid to those entitled to Housing Benefit or the housing element of Universal Credit who face a shortfall in meeting their housing costs.”
  • Noting that housing benefit is paid in arrears as it “reduces the scope for fraud and potential overpayments of benefit.” He said that the Government “has no current plans to change the current payment arrangements for people in Supported Housing who are in receipt of Housing Benefit.”
  • Noting that the Government “will continue to ensure that people who need financial help have access to the benefit system and the wider housing support that is already in place.”

Minister outlines support for students 

Dr Caroline Lucas MP (Green, Brighton Pavilion) has received a response to her written question asking whether:

(a) the Department for Education and 

(b) the Student Loans Company 

plan to provide support to current and prospective students whose parents have lost their jobs as a result of the Covid-19 outbreak by 

(a) facilitating access to full maintenance loans and 

(b) reinstating maintenance grants

Universities Minister, Michelle Donelan MP, said: “Many higher education providers will have hardship funds to support students in times of need, including emergencies. The expectation is that where any student requires additional support, providers will support them through their own hardship funds. Contact details are available on university websites.

“In addition, students will continue to receive payments of maintenance loans for the remainder of the current academic year, 2019/20. Students who need to undertake additional weeks of study on their course in the current academic year may also qualify for additional long courses loan to help with their living costs.

“Parents who have lost their jobs and whose income has dropped by 15% or more in the current financial year will be able to apply to Student Finance England to have their children’s living costs support reassessed for the 2020/21 academic year from 1 August 2020 onwards. This will increase the amount of support students and prospective students are entitled to in 2020/21.

“Information for parents on how to apply for a current year assessment is available on the Student Finance England website here.

Alongside this, the Government has announced a range of measures to protect students and the higher education sector from the impact of coronavirus.

In respect of support for students, the Department for Education says that it has “worked with the OfS to enable providers to draw upon existing funding to increase hardship funds and support disadvantaged students impacted by Covid-19. As a result, providers will be able to use the funding, totalling £46m across April and May, towards student hardship funds and mental health support, as well as to support providers’ access and participation plans.”

Taskforce set up to help homeless during coronavirus 

A specialist taskforce has been created to lead the next phase of the Government’s support for rough sleepers during the pandemic.

Led by Dame Louise Casey, the taskforce will work hand-in-hand with councils across the country on plans to ensure rough sleepers can move into long-term, safe accommodation once the immediate crisis is over.

The taskforce will also ensure the thousands of rough sleepers now in accommodation continue to receive the physical and mental health support they need over the coming weeks while they continue to self-isolate from the virus.

Over 90% of rough sleepers known to councils at the beginning of the crisis have now been offered accommodation where they can remain safe during the crisis.

This has been backed by £3.2 million in targeted funding to help councils get as many people off the streets as possible, with a further £3.2 billion additional funding for councils to help them continue to respond to the pandemic and support their communities.

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.