Yahoo Finance Coronavirus: UK 'must help renters' as mortgage holiday announced
The UK government is under pressure to help renters affected by the coronavirus pandemic after announcing a three-month mortgage holiday for homeowners in financial difficulty.
Chancellor Rishi Sunak promised struggling mortgage borrowers would not have to make monthly payments while they “get back on their feet” as part of an enormous £330bn ($403bn) package of guarantees on Tuesday.
But the measures did not contain support for tenants in private or social housing, sparking a backlash from opposition MPs, campaigners and even landlords. A minister has now promised measures “very shortly.”
“The mortgage holiday will help many homeowners, but what about renters? We can’t force people to choose between following public health advice and paying their rent,” tweeted London Labour MP David Lammy.
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His colleague and shadow Treasury minister Anneliese Dodds told BBC Radio 4’s Today that Britain’s social security net has failed to fully support those unable to cover all their rental costs. Other Labour MPs and campaign groups have called for a “break” on evictions, with a petition now launched over rent payments.
Neal Hudson, a housing expert at Residential Analysts, said official figures suggested around a third of private renters had no savings, and almost one in five only had enough savings to cover three months’ rent.
He added: “The private rented sector is home to many more people than just house-sharing students and young professionals. They include lots of children.”
The National Residential Landlords Association (NRLA) has also encouraged private landlords to defer or even scrap rental payments for those who have lost work. Chief executive Ben Beadle said it was “inevitable” some tenants would struggle to pay their full rent.
But the NRLA wants lenders to “look sympathetically” too at landlords requesting mortgage holidays if tenants cannot pay their rent. Beadle said no lender had so far offered holidays on buy-to-let mortgages.
Beadle also called for the five-week wait for universal credit to be scrapped to ensure tenants can cover their rent, and the government to pause its tightening of mortgage interest tax relief. Many landlords had approached tenants already to reassure them, he added.
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Pressed on the issue on Sky News, business secretary Alok Sharma said on Wednesday morning: "There are millions of renters across the country and some of them will be facing this anxiety.
"The chancellor was very clear yesterday that the housing secretary will be coming forward very shortly to set out a statement on how we will make sure there is protection for renters as well."
Stephen Jones, CEO of UK Finance, which represents leading UK banks, encouraged struggling mortgage borrowers to contact their lenders to discuss their options.
“Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders are keen to reassure homeowners that the industry is working hard to put measures in place to support them during these uncertain times,” he said.
Richard Hayes, CEO of online broker, Mojo Mortgages, warned mortgage holidays were “not free money,” increasing the total amount owed. But he also urged those in trouble to contact their banks.
