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Division of Wealth: The arrears crisis of Kovid rent hurts poor families


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The Covid crisis has opened up the division of wealth between rich and poor families. Wealthy Britons saved money during the lockdown because they canceled foreign vacations and saved on travel costs. In contrast, many poor families face financial hardship and are in arrears of extra rent due to job losses and declining incomes. Across the UK, rent arrears add 360 million charities according to Step Change.

What is behind the rent arrears crisis? Is it likely to continue? And what can you do if you have financial problems and can’t pay your rent? Here’s what you need to know.

Why the rent arrears crisis?

It’s simple: if you don’t have money, you can’t pay the bill. And it happened to thousands of low-income families during the Covid crisis. Since their money ran out, many poor families have faced additional rent arrears. Among the reasons leading to the rent arrears crisis are:

  • Many private tenants lost their jobs or lost their time during the Covid crisis. According to the Step Change report, “Half of the private tenants have lost their incomes because of Kovid, which has put them in particular financial trouble.”
  • Poor private tenants usually have less household savings than rich families. This means they can deal with significant losses of their income for a shorter period of time.
  • Low-income families often rent smaller homes than richer ones. This has made it especially difficult for them during the Covid crisis. Some space-constrained parents have had to work harder or fewer hours working from home due to home-schooling during the lockdown.
  • There is a crisis of life for the family at the moment. Food costs, energy bills and housing costs are all rising rapidly. This makes it difficult for families who are already struggling financially.
  • The government has changed the rules for landlords during the Kovid crisis and made it difficult for them to evict tenants. This increases the rent arrears because the families can stay in the residence for a long time before the eviction.

Is it likely to continue?

The crisis of life seems to continue during the winter. Consumer costs are rising due to the shortage of HGV drivers and rising gas prices. It’s going to be a long, tough winter for struggling families, and things will probably get worse before things get better.

What can you do if you fall behind in your rent?

If you are struggling financially and can’t pay your rent, the positive steps you can take are:

  • Create a detailed budget to see if you can save costs elsewhere. Zero-based budgeting is a good budgeting method if money is really tough.
  • Keep good records. Make sure your landlord is asking you to pay the right amount.
  • Talking to your landlord. They may agree to a repayment agreement where you will pay the arrears slowly over a period of several months.
  • Ask for help. Charities such as Citizen Advice and Step Change can help advise on clear payments and rent arrears.
  • Make sure you understand your legal rights as a tenant. You have the right to be protected from unjust evictions.

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