Resolution Foundation Research on Housing and Covid-19
The UK think tank Resolution Foundation has produced a number of essential reports on the Covid-19 crisis over the past 9 months, including the most recent report focused on the necessity of reforming Statutory Sick Pay to support the Covid-19 recovery phase. In addition to analyses of household and Government spending related to Covid and the impact of low-paid employment, the think tank has produced research focused on the inter-generational impact of the pandemic. A number of their recent reports have focused on the impact of Covid-19 on housing, including a forecast of the potential negative equity crisis in the aftermath of the pandemic.
Coping with housing costs during the coronavirus crisis
The think tank released two reports in 2020 which looked at the impact of housing costs during the coronavirus crisis – based on a survey of over 6,000 people throughout the UK. Key findings include:
- Renters have taken the biggest earnings hit as a result of the pandemic and are more precariously positioned for the future than homeowners.
- People needed to access numerous types of support to cover their housing costs, including using borrowed money to pay for rent or mortgages (this was the case for one in ten private renters which was a greater proportion than either social tenants or homeowners).
- Most households cut back on spending on other items (including essential items such as food and clothing) – this was the case for one in five renters.
Renters more likely to have lost work as a result of Covid-19
Whilst earnings falls were experienced relatively equally across all tenures in the early part of the crisis, by September both private and social renters were more than twice as likely than mortgagors to have lost their job, a finding that was consistent with their work showing that younger and lower-paid workers (who are more likely to be renters) had born the brunt of the Covid-19 jobs crisis. This ties in with recent research by Housing Rights which showed that private renters have submitted more claims for help with housing costs during the pandemic than other types of occupiers.
Limitations of state support for new claimants
Many households have had to rely on state support for the first time to help pay for their housing costs. These households may not have been fully prepared for the reality of recent programmes of welfare reform.
- New private renter claimants will likely receive much less in benefits than they require in order to cover their full contractual rent. This may come as a surprise to many, particularly those who have not claimed benefits before.
- Many new claimants, particularly those with larger families, will have enjoyed a grace period from the impact of the benefit cap. They may struggle to manage when this nine-month grace period ends and their benefit payments reduce significantly.
- Homeowners who can no longer avail of a mortgage payment deferral may need to wait several months before they can receive any state help with their mortgage costs, and the help they do receive will be in the form of a repayable loan, secured as a charge on their home.