A £360m “wall of rent debt” built up during the pandemic combined with cuts to Universal Credit threatens to leave hundreds of thousands of tenants facing long-term housing insecurity and problem debt, according to StepChange.

Since March 2020, StepChange’s research has revealed a tale of two pandemics, with renters one of the groups most likely to have faced a prolonged loss of income or experienced a negative financial impact.

Around half a million private tenants are now “battling” to stay on top of £360m rent arrears.

The polling shows how the Government’s planned £20 per week cut to Universal Credit “threatens to escalate entrenched difficulties caused by the crisis and exacerbate a two-speed recovery.”

The charity’s research shows 558,000 Universal Credit claimants in Covid rent arrears – including private and social renters – say the planned cut means they will struggle to pay existing rent debts over the next 12 months.

Despite the reopening of the economy, StepChange’s polling shows how rent debt levels have not budged over the past nine months and threaten to escalate as Covid support is withdrawn.

225,000 private renters now expect to lose their homes due to not being able to keep up with rents and many see no way out of entrenched pandemic-related difficulties.

StepChange is warning that unless the Government changes tack on Universal Credit and delivers an urgent package of targeted support, many private renters face long-term housing insecurity, and prolonged debt harm. This includes the threat of court action, long-term housing insecurity, homelessness and eviction.

The charity’s research points to both the deepening and widening of difficulties from the £20 per week cut. StepChange found 4.3 million people expect to carry on with a claim over the next twelve months, 1.3 million more than were on the benefit in March 2020, with reduced support.

The research shows that while some renters are optimistic about recovery, with a quarter (24%) expecting to find more work in the next 12 months, for many in entrenched debts, work will not necessarily avert financial difficulties.

One in ten in-work renters in arrears expect to be evicted from their homes as a result of these arrears in the next twelve months, showing that targeted support remains essential to stop the looming shadow of serious debt harm.

StepChange is calling for the Government to provide an emergency financial support package to help renters worst affected. Such a scheme, as in Wales and Scotland would help renters to safely wind down Covid-related rent arrears and ensure help for renters to keep their homes.

The charity is also urging the Government not to cut £20 a week from Universal Credit and ensure renters and other low-income households get the financial support they need to sustain tenancies and keep up with essential costs.

This would help to reduce the long-term cost to public services like housing, health and mental health that would otherwise be inevitable – and help to offset some of the annual £8.3bn cost of problem debt to the economy.

Phil Andrew, Chief Executive of StepChange Debt Charity, said: “For 18 months, renters have been at the sharp end of the pandemic. Sadly these figures show a huge number of people worried about how they will keep up with their rent. While the end of restrictions will allow some get back to their feet, thousands are still facing a mountain of rent debt they are unable to address alone.

“The Government’s own research shows that private renters have been hardest hit by the pandemic, and that numbers in rent arrears have more than doubled since March 2020.

“Covid support schemes, while a lifeline for many, haven’t been able to help renters address their arrears and with cuts to Universal Credit and the end of furlough imminent, there is a real danger of thousands losing their homes.

“That’s why StepChange is calling for a dedicated financial support to help ensure renters can safely wind down Covid rent debts and keep their homes.

“By establishing a dedicated rent debt fund, and by scrapping the planned Universal Credit cut, the Government can avert the threat of a rise in evictions, problem debt and homelessness that will compound financial and social problems and hamper economic recovery.”