Published on 13 October, the third and final part of the government’s Household Resilience Study explores how the Covid-19 pandemic has affected people’s housing circumstances in England. While there are no shock revelations, the research does shed further light on ‘hidden’ issues like the ongoing arrears problem in the private rented sector. 

What is the Household Resilience Study?

The Household Resilience Study is a sort of spin-off of the long-running English Housing Survey – which has been going since the late 60s. The idea was to try and assess how the Covid-19 crisis had affected people's housing circumstances, using the 2019-20 English Housing Survey (i.e. the last one before the pandemic hit) as a baseline.

Researchers went back to the same households that had responded to the 2019-20 survey, approaching them three times for three different reports. The first report was based on responses from June-July 2020, the second report was researched in November-December 2020, and this third and final report is based on a study conducted in April-May of 2021.

More households in mortgage arrears than before the pandemic

Compared to pre-pandemic levels, the study found that more people were in arrears on their mortgages. This has fluctuated significantly since coronavirus first turned up. 

Before the pandemic, just 0.5% of people with mortgages were in arrears, but by June-July of 2020 – after the shock of the initial lockdown – this proportion was up to 6%. By November-December of 2020, various measures had kicked in and the figure was back down to 1%, but it appears to be on the rise again now. The April-May survey found that 2% of those with mortgages were in arrears, but also that 10% said they had found it difficult to keep up with their mortgage payments in the last year. 

It's difficult to know why this spring spike in mortgage arrears occurred. It could be that as furlough began to taper off, people found their finances getting tighter, but it may also be connected to the post-pandemic property sales boom – which saw a lot of people upsizing and in some cases choosing to commit a larger proportion of their income to their mortgage.

Rental arrears are still high

Private renters have been among those hardest hit by Coronavirus. Before the pandemic, around 3% of private renters were in arrears, but come April-May of this year when the latest survey was done, that figure was up to 7%. Even more concerningly, a further 9% of private renters considered themselves likely to fall behind with their rent in the next three months.

People are turning to their savings to keep up

Another concerning figure in the latest Household Resilience Study report is that more than one in five respondents had recently used their savings to pay their rent or mortgage. Again, this percentage was especially high (nearly 30%) among private renters. 

The issue with this, of course, is that eating into savings to pay ongoing costs like rent, mortgage, food or utilities just isn’t sustainable in the long-run – so in a way it’s disguising the number of people who would otherwise be in arrears if they didn’t have savings to fall back on. In the case of renters, it’s also hampering their ability to build up enough of a deposit to eventually become homeowners.

Overcrowding remains a problem

Compared to pre-pandemic levels, overcrowding has increased to some extent for owner-occupiers (1% to 2%), but very significantly among private renters (7% to 14%). There could be all kinds of reasons for this. With most university tuition taking place remotely, students may have chosen to live at home with their parents rather than independently, as may younger working people who found themselves out of a job during the repeated lockdowns. In general, overcrowding tends to mean people are looking to cut housing costs by sharing – indicating that their finances feel more precarious than usual.

Social renters have seen more stability compared to private renters

Though they're still more likely than private renters to be behind on their rent and bills, the proportion of social renters in arrears hasn't changed significantly since before the pandemic. Likewise, overcrowding in social housing doesn't seem to have got worse since the 2019-20 English Housing Survey.

In some ways this says less about the situation for social renters (who remain disproportionately vulnerable in many ways), and more about the huge impact the pandemic has had on private renters. There could be a number of causes behind this – for example, private renters are often younger, frequently work in industries that have been harder hit by the pandemic, and are more likely to have been made redundant or furloughed.

Charities and industry bodies have been highlighting the plight of private renters for a while, but the government remains reluctant to take action. Since this is the final report from the Household Resilience Survey, it might become more difficult to monitor their situation in such a consistent and independent way, but many commentators feel like things are unlikely to improve without some form of government bail-out.