Sam Pinnock was earning a steady £400-£600 a week as a chef when the coronavirus crisis shut off his source of income. First, he lost his job helping with Sunday buffets at the country club near his home in Hertfordshire; then the London street stalls where he freelanced on other days closed.
Benefits payments and help from the government’s self-employed support scheme do not cover his rent and living costs as a lodger. His landlady — who did not want him to find a new job because she was worried about contracting the virus — agreed at first that he could make up the difference by doing odd jobs in the garden, but he moved out after the relationship broke down.
For the past two weeks, he has been living in a converted shed in his parents’ garden, hunting for work and “robbing Peter to pay Paul” while trying to retrieve his belongings. “She’s holding my stuff hostage.”
Large numbers of renters across the UK could soon find themselves in a similar position. Although they are currently protected by the government’s three month moratorium on evictions, this is set to end within a month.
Ministers have extended the three month mortgage holiday granted to homeowners struggling because of Covid-19, but, despite Housing secretary Robert Jenrick hinting he might do so, the government has not yet announced any similar stay of execution for renters.
In recent weeks Shelter, the housing and homelessness charity, has seen a “huge surge” in demand from people who previously had stable finances, but have now lost their jobs and are unable to meet rent payments, according to Chris Wood, the charity’s assistant director of research and strategy.
While the government has made housing benefit more generous, many low-paid workers who have lost part of their income while on furlough are struggling, while others who were previously able to afford above-average rents are now scrambling to find cheaper properties.
“At the moment, there are so many people from different groups who would never have thought they would be relying on universal credit . . . it is proving hard for people to find and move somewhere cheaper,” Mr Wood said.
Even before the crisis, people living in the private rented sector spent a bigger share of their income on housing costs than homeowners. Research by the Resolution Foundation, a think-tank, shows they also have lower savings, are more likely to work in sectors that have shut down or be affected by school closures, and less likely to be able to work from home.
MPs on a parliamentary committee covering housing warned on Friday of a “looming crisis in the private rental sector,” with many tenants amassing significant rent arrears.
“If landlords don’t get rent for months, they will resort to illegal evictions,” said Jacky Peacock, director of Advice4Renters, an organisation that offers legal advice to tenants.
The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here.
One man she was advising had been laid off and needed to claim housing benefit, but his landlord was refusing to provide the details of the tenancy he needed to make the claim — most likely because the accommodation was a substandard “beds in sheds” arrangement that he should not have been letting.
“It was a horrendous crisis before the lockdown . . . it’s hard to imagine it won’t be horrendous [after],” Ms Peacock said.
Even at the reputable end of the market, housing and debt advisers fear that when the government moratorium expires, there will be a wave of evictions that already overburdened courts will be unable to handle fairly.
One proposal floated by Mr Jenrick is for a “pre-action protocol”, which would place a duty on landlords to try to agree a repayment schedule with tenants before resorting to eviction.
The National Residential Landlords’ Association supports this, saying the “vast majority” of its members have responded positively to tenants who approached them for help.
But campaign groups say it would offer tenants no real protection, if landlords did not negotiate in good faith, since judges have no discretion to refuse a landlord’s attempts to regain possession of a property on the grounds of rent arrears.
Moreover, since the government has not yet acted on its promise to end no fault evictions, landlords could simply bypass any such requirement by issuing a so-called section 21 notice, signalling the end of a renter’s tenancy.
The Labour party has called for the moratorium on evictions to be extended for a full six months, with tenants given a full two years to pay off arrears — a proposal that is unlikely to find favour with the government and landlords since it would put many small landlords under extreme financial pressure.
But the parliamentary committee called for judges to be given discretionary powers when tenants were in arrears owing to coronavirus — arguing that these powers should remain in place until the government could follow through on its pledge to end no-fault evictions.
“The Conservative party cast themselves at the last election as the party of renters,” Mr Wood said. “Now they have to follow through.”