In the middle of the coronavirus crisis, social landlords are hiking rents. The government needs to act swiftly.
Housing association tenants are more likely to be suffering from social isolation, threats to employment and exposure to Covid-19 in poorly paid jobs. Few realise that they’re also facing a rent hike.
This Monday, social landlords increased their rents by 2.7%. Little wonder that pressure is growing to suspend rent payments to ease financial pressures.
In countries implementing a lockdown, those renting their home are becoming more vocal on the possibility of rent strikes. Pressure is mounting across the globe and there are demands in Boston and New York in the US, South Australia and Canada.
In the UK, rent strikes are being discussed in numerous major cities, notably in Islington in the capital. In Cheltenham, estate agents shop windows have been graffitied with slogans such as “Can’t Pay? Don’t”.
One area where there is a greater degree of influence over rents is in housing associations. Following nearly 50 years of subsidy, these are wealthy organisations. In England, their collective surplus for 2018-19 alone was £4.7bn. What better way to ease the burden on their tenants than to remove all rent charges for the month of May?
There is a precedent. In July 2015, the Chancellor announced that rents in social housing would be reduced by 1% a year for four years, resulting in a 12% reduction in average rents by 2020-21. The measure was forecast to save £1.4 billion by 2020-21, primarily in reduced Housing Benefit expenditure.
Around 1.2 million tenants not in receipt of Housing Benefit in the social rented sector were expected to benefit by £700 per year (2015 prices). Introducing a rent-free month in May would again be a 12% decrease.
Implementation could be simple and swift. No primary legislation would be necessary. Direction could be made by the Regulator of Social Housing to return payments of the entire May rent charge. After all, Covid-19 has seen considerable cost reductions as housing associations suspend planned improvements and routine repairs.
These are exceptional times. Street homelessness was eradicated in two days and with one sweep health trusts debts were erased.
The left would do well to promote the suspension of rent. If no action is taken, tenants may take matters into their own hands.
Peter Brown worked in housing for 40 years, including for the last 27 years as a Chief Executive of six different housing associations.