Solving our housing crisis

Steffan Evans takes a look at the Welsh Government’s new Tenancy Hardship Grant and considers what role it could play in easing the housing crisis.  

Earlier this week the Bevan Foundation published a new report looking at the impact of the pandemic on poverty this spring. The report contained a number of concerning findings, perhaps the most important of which was that one in ten Welsh households have either already been notified that they will lose their home or are worried that they will lose their home.

The Welsh Government’s announcement that it will be introducing a Tenancy Hardship Grant is therefore a welcome first step in easing the pressure felt by families. But will it be enough and what more might we be able to do?

Is the Tenancy Hardship Grant a good idea?

First, it is worth acknowledging that the Welsh Government’s decision to introduce a Tenancy Hardship Grant is a welcomed step. The fund will replace the Tenancy Saver Loan scheme, which provided tenants who had fallen into arrears on their rent with a loan which would be repayable to the Welsh Government over five years.

The Bevan Foundation and others have been calling on the Welsh Government to convert the loan scheme into a grant scheme for a number of months, arguing that whilst the loan scheme may have helped prevent immediate eviction, it risked trapping households in debt for years. The low take up of the loan scheme further emphasised the need to move to a grant based approach.   

The Tenancy Hardship Grant also addresses a gap that has developed between the support that is on offer to household in receipt of housing related benefits and households that don’t. Households that are in receipt of housing related benefits have been entitled to grant based support through Discretionary Housing Payments for the duration of the pandemic. Renters who are not in receipt of such benefits had only been eligible for a loan. Closing this gap ensures that fewer households will be trapped in debt as we recover from the pandemic.

What gaps remain in the support on offer?

Despite being a welcomed development there are still likely to be gaps in the support that is available to people who have fallen behind on their rent due to the pandemic. Whilst we await finally confirmation of the scheme’s eligibility criteria some possible concerns include:

Will the money be enough? There are over 150,000 households in Wales worried about the security of their housing. Will £10m through the Tenancy Hardship Grant and an initial £8.5m through DHPs really be enough to meet demand?

What about tenants not in receipt of housing related benefits that live in the social rented sector? The Tenancy Hardship Grant is only available for people renting in the private rented sector. There are tenants in the social rental sector, however, who are not in receipt of housing related benefits, who have also built up arrears. As it stands these tenants will not be entitled to any support beyond what social landlords can offer.

Will support be difficult to access? Having a separate system for people in receipt of housing related benefits and people who are not in receipt of such benefits risks adding a layer of confusion and bureaucracy to the system. Will tenants be clear which scheme they can receive support from, and will a no wrong door approach be adopted?

Could tenants be evicted anyway? There are concerns that some unscrupulous landlords may take advantage of the scheme but then evict their tenants regardless. Will measures be taken to protect tenants from such practices when the fund is distributed?

Working towards solutions

There are actions that could be taken to plug the gaps that are likely to remain in the system even after the introduction of the Tenancy Hardship Grant.

One possible solution could be for the Welsh Government to work directly with social landlords to agree a settlement that allows social landlords to write off arrears that have built up within the sector. This would ensure that tenants who are not eligible for the Tenancy Hardship Grant nor DHPs receive support and could free up DHP funds so that more support could be targeted at the private rental sector. 

The Welsh Government could also seek to provide additional funds for DHPs. The commitment already made to top up DHPs by £2.6m is to be welcomed but the Welsh Government is permitted to invest over £7m more.

Taking administrative steps to ensure that a no wrong door approach to housing support is adopted could also be an easy way to maximise the number of tenants that receive support. Whilst the Welsh Government should take measures to ensure that no landlord that benefits from the Tenancy Hardship Grant is permitted to evict their tenant.  

A longer term answer?

The housing market in Wales did not work for too many people long before the outbreak of the pandemic. Whilst the pandemic has undoubtedly had a devastating impact, thousands of households across Wales were already struggling to find enough money to cover their rent. The measures already taken by the Welsh Government are to be welcomed, but, if we are serious about rebuilding our economy in a way that is just, then it is vital that we take broader action to reform of our housing system.

To read more about some of the work that the Bevan Foundation is doing on this then make sure you visit our website to read more about our projects, and ideas.