Pandemic may have temporarily eased rental pressure – ESRI
Study suggests fall in income offset by lower spending on childcare, transport and leisure
Researchers found one in five renters faced ‘considerable affordability challenges’ during the lockdown period, down from one in three. Photograph: Frank Miller
Financial pressures on renting households are unlikely to have worsened as a result of the pandemic and may have even eased, according to research from the Economic and Social Research Institute (ESRI).
A study by the think tank found that the number of renters facing “considerable affordability challenges” fell from one in three to one in five during the lockdown.
This was because the decline in income experienced by renters was offset by falls in spending on childcare, transport and recreational activities.
The ESRI notes that incomes in many cases were supported by the two Government wage support schemes, which mitigated the shock.
However, the institute warned the Covid-19 outbreak and subsequent lockdown represented a “unique and extraordinary” event, and the easing of affordability pressures is unlikely to last.
“The very extreme and unique set of circumstances during the lockdown may have provided many households with a buffer to cover rental payments as other spending pressures declined,” the ESRI’s Conor O’Toole said.
“However, these are very short-term effects and unique to the lockdown. Many private renters face longer-term affordability pressures that are likely to worsen quickly as spending needs (such as on transport and childcare) rebound quicker than incomes,” he said.
Separately, the study noted that one in 10 households missed payments prior to the pandemic and, given the affordability trends, this is unlikely to have risen substantially in the short term.
Nonetheless, it warned there was a “data gap” in terms of measuring rental arrears, indicating that “no current, real-time national data is available at present”. It said addressing this gap should be a priority.
Fellow researcher Rachel Slaymaker said: “The pandemic-related unemployment crisis is concentrated in sectors of the economy (such as accommodation and food) whose employees are more likely to be renters than homeowners and, as such, renters have seen their incomes fall to a greater extent.
“This may further enhance affordability pressures if incomes are slow to rebound,” she said, warning that any tapering of the income supports would have a disproportionate effect on this group.