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Sat, 30 May 2020

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Coronavirus
Coronavirus
Coronavirus
Coronavirus
Press releases
By IPSE
By IPSE

Labour says landlords should be made to give three-month rent break to tenants squeezed by coronavirus

Labour says landlords should be made to give three-month rent break to tenants squeezed by coronavirus

Ministers have promised to shield renters from evictions during the coronavirus crisis.

4 min read

Tenants struggling with the economic impact of the coronavirus shutdown should be able to stop paying rent for three months, Labour has said.

The party said landlords should be willing to accept "small declines in their regular income" in a bid to avoid people in rented accommodation losing their homes if they fall on hard times.

The Government has already promised that landlords will not be able to start eviction proceedings against a tenant without giving them at least three-months' notice, with the new rules in force until 30 September this year.

Landlords have also been advised "not to commence new notices seeking possession during this challenging time without a very good reason to do so".

But Labour has argued that the measures fall far short of a promised "complete ban on evictions" during the crisis.

A new report from the party's outgoing Shadow Chancellor John McDonnell said the Government's plea for landlords and tenants "to come to arrangements where necessary is profoundly insufficient".

And it said: "Where necessary rent payments should be suspended for a three-month period to enable people to feed themselves and their loved ones, and to avoid driving people into destitution; at a time of widespread job losses and wage cuts of at least 20%, it is not unreasonable for landlords – many benefiting from a mortgage holiday – to prepare for small declines in their regular income."

The opposition party is also calling on ministers to look at a New Zealand-style plan to freeze residential rent hikes for the next six months, as well as the suspension of the Government's 'spare room subsidy' policy, dubbed the 'Bedroom Tax' by critics, for the duration of the crisis. 

That policy sees social housing tenants face reduced help with rent if they are deemed to have more bedrooms in their property than they need. 

Labour is meanwhile pressing or a complete "moratorium" on energy firms being able to cut off people struggling to pay the bills. 

Ministers have said hard-up customers on pay-as-you-go energy meters who ask energy firms for help will not see their supplies disconnected. 

Customers with pre-payment meters - often used by people in tight financial circumstances - are able to speak to their suppliers about options to keep their homes heated and powered if they are unable to add credit.

Under government plans, firms are asked to consider measures including allowing a third party to top up on a customer's behalf, having a discretionary fund added to their account, or being sent a pre-loaded card by the supplier.

But Labour said the Government "must introduce" a total ban on utility disconnections for all customers.

The party argued: "This is unlikely to cause financial hardship for household
utility companies, which had their share prices increase between 2 January and 23 March, according to analysis by the IFS (while share prices of tourism and leisure sectors, the automotive sector, and the building sector plummeted)."

Its report added: "There needs to be ongoing public oversight of utilities, given potential threats to capacity and affordability. Western Australia’s freeze on household fees, including electricity and water charges, provides a feasible model of what can be done alongside a moratorium on disconnections.

"The United Kingdom is fast becoming an outlier in taking no meaningful action on utility bills."

Launching the new report, which Labour has billed as a "constructive" set of proposals, Mr McDonnell said: "As we move into the next stage of this crisis, which we are all working so hard to tackle, we have to build into our social protection system the resilience we need to deal with the growing strain on our economy and public services in the coming days.

"An increase in benefit levels, and further action on rent and utilities, will give the protection that is needed for people in and out of work in the days and weeks ahead."

Read the most recent article written by Matt Honeycombe-Foster - Coronavirus: Rishi Sunak vows fresh help for self-employed as firms take on more furlough costs

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