Trade unions and housing campaigners are urging the government to write off debts for the 840,000 tenants who have fallen behind with their rent during the pandemic.
There is speculation that Rishi Sunak is readying a bailout for landlords in Wednesday’s Budget speech.
But unions including Unite, Unison, GMB, the IWGB, NASUWT, CWU and NEU have backed a call by renters’ groups to make sure the burden of paying back debt does not fall on tenants who lost their jobs because of lockdown.
There is speculation that the government might cover landlords’ lost income with loans but arrange a payment plan for renters to pay it back gradually.
But in a letter to the government, the groups, which also include the London Renters Union, Acorn, and Generation Rent, say any solution must “resolve rent debt in a way that shares costs fairly between landlords and taxpayers”.
“Handing over public money to wealthy landlords who can afford to absorb the cost of missed rent payments will only make the problems in our rigged housing system worse,” said Amina Gichinga from London Renters Union said.
“Government-backed loans would help underwrite landlord profits but would leave renters pressured to take on massive debt repayments they can’t afford.
“If you can’t afford your rent, how can you afford loan repayments? There’s nothing in the proposals for grants or loans to pay off rent debt to stop landlords taking the cash and evicting their tenants anyway.
“Before we start talking money, the law should be changed so people in arrears due to pandemic can’t be evicted.”
While the government has an “eviction ban” in place, it introduced a loophole in February that allows landlords to evict people with more than six months rent arrears – including any accrued during lockdown.
The letter says the the government “needs to redress the current imbalance in Covid-related financial support, which has largely flowed to landlords rather than renters”.
The organisations cite the “significant financial support” for landlords from the government over the past 12 months, including the stamp duty cut, low interest rates, and landlord eligibility for mortgage holidays with no requirement to pass this on to tenants.
Instead of a loan scheme, the groups say the chancellor should instead create a Covid rent debt fund to clear debts to landlords of up to 80 per cent of what they are owed – mirroring the furlough scheme. They say smaller landlords who cannot absorb costs should be prioritised over institutional investors.
Average arrears are £730 per person who owes money, according to the charity Citizens Advice.
Miatta Fahnbulleh, chief executive of New Economics Foundation, which also backed the letter, said: “While landlords have received generous government protections, thousands of people will be imminently evicted from their homes for Covid-related rent debt unless the government intervene.
“Meanwhile, tens of thousands of renters are living with the day to day misery of impossible rent debt burdens accrued over the past year, denying them a secure place to sleep, eat and stay well.
“Over the last five years, private renters have been organising, and have become a political force to be reckoned with. They won’t forgive this government for breaking its promise to protect people from homelessness under the pandemic, nor for the unfair treatment received by hard-hit renters compared to landlords.
“It’s not too late for Rishi Sunak to change course with measures in the Budget that will allow him to look the UK’s 9 million renters in the eye.”