Renting has always been precarious, but the pandemic and recession have made things even more worrying for people who don’t own their homes. Here, Stylist speaks to three experts about the future of renting in the the face of economic uncertainty.
When we first went into lockdown, mortgage holidays for homeowners and landlords were announced. Plans for emergency legislation to protect private and social renters from eviction were announced a day later.
Private renters have had to negotiate with their landlords to get a rent reduction if they needed one.
And, when Rishi Sunak shared the mini-budget earlier this summer, renters looked on from the sidelines as it was announced that stamp duty will be cut for home-buyers over the next year.
On 20 September, the eviction ban will be lifted, despite research from housing charity Shelter predicting that 230,000 private tenants in England have fallen into arrears since the pandemic started.
With renters receiving six months’ notice if their landlord plans to evict them, leader of the opposition Keir Starmer has said this just gives “renters a few more weeks to pack their bags”.
It feels very 2008: the year we learned we’d probably be renting for the rest of our lives if we didn’t have the Bank of Mum and Dad to help buy a first home.
But what does it mean this time round? How will the biggest recession on record affect renters?
Things are still very much up in the air at the moment, but three experts speak to Stylist about what they expect to see and what renters should keep in mind.
Remote working could work in private renters’ favour
After the last economic crisis, SpareRoom saw an increase in homeowners taking in lodgers to top up their incomes or, in some cases, cover their mortgage and keep their homes – and it’s expecting to see this continue to increase over the next months, probably even years.
“Sadly, we’ve already started to see substantial job losses across the UK and the end of the government furlough scheme is likely to mean more are on the way, says company director Matt Hutchinson. “We expect to see more and more people turning to flatsharing to keep costs down. Some will have shared before, but others may be coming to flatsharing for the very first time later on in life.”
However, on the flip side, the fact that people are now working from home means that people are less tied to a specific location – including London, where the rent rates are infamously high.
“We’ve already started to see early signs of people shifting away from London and rents falling in the capital.,” explains Matt. “It’s too early to say for sure but this could mark the start of a gradual drift away from big cities as the economy becomes less reliant on people being able to work in the capital.”
A very small number of private renters could benefit from lower rents
Campaigning group Generation Rent reports that one in five renters struggling to pay rent are at risk of eviction, and the recession is only set to make that worse unless the government takes bigger action.
“To compound the situation, 60% of renters currently searching for a new home reported struggling to find accommodation that they could afford or that they’ll be accepted for,” says policy manager Caitlin Wilkinson.
“Some have suggested that rents will fall due to the recession, but so far that’s mainly only happened for high end properties in the centre of cities, many of which are former Airbnbs.
“To ensure every renter has a safe and secure home for the duration of the pandemic and resulting recession, the government must take steps to reduce evictions in the private sector and ensure the benefits system covers housing costs.”
If you have managed to save while renting, now is an opportune time to finally buy
If you have been saving for a first home while you’ve been renting, now might be a good time to seriously look at taking the next big step, despite the apparent challenges of the pandemic.
“The housing market in England is ‘reopen’ for business and the government’s decision to introduce a stamp duty holiday until 31st March 2021 on homes valued up to £500,000 could save you thousands,” says Emma Harvey, director of mortgages at MoneySuperMarket.
“Before you start viewing properties, it’s a good idea to get a borrowing agreement in place in principle with a lender to give you an idea of how much you will be able to borrow. You should also make sure you are able to afford the monthly repayments before you place an offer on a home.”
However, it’s also important to remember that any monthly repayments and rates you see could change when you apply for a mortgage in principle and a mortgage offer, once the financial checks have been carried out.