Digital rental marketplace, Canopy, is urging the industry to step up and provide more support for struggling tenants who could face homelessness when private landlords are able to return to the courts to start eviction procedures from September 20th.
Though the government has said it wants the courts to be a last resort and landlords to ‘exhaust all possible options’ before considering eviction, including flexible rent payment plans, those tenants who have fallen behind on their bills may be in danger of losing their homes.
Tenants across the UK are facing unprecedented times with recent research showing an estimated 227,000 adult private renters have fallen behind with their rent since the start of the pandemic.
Unless the Government acts to protect renters thrown into financial difficulty by the crisis, judges will unable to prevent them from losing their homes once the ban is lifted. Citizen’s Advice’s poll of just over 1,000 private renters, reveals 174,000 private tenants have already been threatened with eviction by their landlords or letting agents.
The charity has claimed there is a ‘looming threat of eviction’ that is taking a toll on the mental health of private renters, with nearly a third of renters – 2.7m adults – feeling more depressed and anxious about their housing situation.
Tenants are also facing rising rental costs, with sizeable increases in most regions of England despite, the five-week deposit cap. According to ONS, the largest rise was in the South West, where the initial cost rose by 4% year-on-year to £1,841. The upfront cost in Corby was found to be up 24% to £1,566, while Exeter and Charnwood showed a 23% increase and Oxford showed a 16% increase.
Canopy is urging landlords to release the cash in deposits and replace them with a deposit replacement insurance policy so that tenants can pay their rent. It is estimated that £4.5bn of cash is tied up in rental deposits and in these challenging times, many tenants could really do with the extra cash, being placed back in their pockets.
Tahir Farooqui, Founder and CEO of Canopy, commented: “Whilst the UK Government has taken a number of steps to help families tackle the potential economic damage caused by the pandemic, including mortgage holidays, millions of renters in the UK are finding it incredibly hard to manage basic financial obligations, such as paying rent or bills.
“We are urging landlords to hand back cash deposits to renters in dire need and replace them with our low-cost, deposit insurance policy. It’s a one-off premium, paid by the tenant and the only product in the UK market which in addition to covering the landlords’ deposit, also protects tenants in the event of major life events e.g. critical illness or job loss.
“COVID-19 is having an enormous impact on the livelihood of renters and we feel that now, more than ever, is the time for the industry to come together to bring hope and support to the millions of renters and create a true sense of solidarity and community.”