Coping with housing costs during the coronavirus crisis

This latest report from UK think tank Resolutions Foundation presents the flash findings from their coronavirus survey.

Many (including us) have speculated about how families may be managing their housing costs during the coronavirus crisis. In this spotlight we move from conjecture to firm evidence, presenting findings from our new survey of UK working-age adults on levels of housing stress, and how families in different housing tenures are coping. We find that while the earnings hit has been widely experienced across tenure groups, renters are one-and-a-half to two times more likely to have fallen behind with their housing payments compared to mortgaged home owners. Owners entered the crisis with lower average housing costs and a bigger financial buffer than renters, and have also been more successful at directly reducing housing costs in recent weeks. While just one-in-twelve home owners applying for a mortgage holiday have been refused, that figure stands at one-in-two for those renters who have sought a rent reduction. While the social security system potentially offers a (more generous) backstop for renters, eligibility rules and caps leave some renters without adequate support. Our survey shows that one-third of new benefit claimants are in housing cost arrears. We note that across tenure groups, cutting back spending on other items has been the most common way in which families have managed housing costs during the crisis. Worryingly, a majority of renters who have done so are also at risk of material deprivation. Finally, our survey shows that a small group of (especially younger) people have moved to another home, but this is largely the preserve of those with parents willing and able to provide accommodation. Whether the coping strategies we identify in our survey can stave off large scale arrears in the medium term remains an open question, but we argue that policy needs to respond to the plight of private renters in the here and now.

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