Researchers at the Resolution Foundation think tank said homeowners appear “relatively well protected” from previous economic downturns thanks to “unprecedented action” by the government. But they warned that renters were more likely to face the double blow of working in affected industries and spending more of what they earn on shelter costs.
The government has launched an unprecedented series of measures to try to protect people from the financial impact of the coronavirus shutdown.
For homeowners, the government has agreed with lenders that those experiencing financial difficulties may request to defer mortgage payments for up to three months.
The ministers also announced a total ban on the eviction of private and social tenants for three months in England and Wales.
But the Resolution Foundation said private renters were more exposed to an economic shock, spending about a third of their income on housing, compared to 13% for homeowners.
Tenants of social housing have been particularly affected by the economic impact of foreclosure measures against the virus.
The focus group discovered that four out of five people work in areas directly affected by the restrictions, such as hospitality, travel and retail, cannot work at home or have to care for children while children are out. schools remain closed.
Only half of the owners found themselves in one of these situations.
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The government is temporarily making the housing allowance system more generous by increasing it to cover 30 percent of the average market rent in each area.
The Resolution Foundation said that this change in benefits was welcome, but that tenants would still face “significant deficits” if they lost their jobs.
He also warned that the increase could push families above the benefit limit, which restricts the total benefit paid.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “We are protecting tenants by prohibiting evictions for at least the next 90 days, have launched programs to keep people in their jobs and support workers freelancers, announced a £ 500 million hardship fund and increased the amount of universal credit and local housing allowance people receive. “
The Resolution Foundation’s warnings come after the same think tank predicted that around 11 million British workers could be on leave during the foreclosure, at a cost of up to £ 40 billion for the government in during the first three months only.
The ministers declined to comment on when the lock could begin to ease, but recognize that the current situation is not expected to change dramatically in the coming weeks.