A new analysis from Freddie Mac, the US Federal Home Loan Mortgage Corporation (FHLMC), using a multifamily research group’s data, examined five major resources capturing rent payment information. It concluded in a new report that overall rental payment performance has remained strong in the face of the pandemic and the economic downturn.
The Freddie Mac studies found that, on average, 93.6% of renters paid full or partial rent in May and 94.2% paid full or partial rent in June. The findings are said to closely align with the National Multifamily Housing Council (NMHC) Rental Payment Tracker, which reported 95.1% and 95.5% respectively.
Steve Guggenmos, vice president of Multifamily Research and Modeling at Freddie Mac says:
“The surveys analysed in this report provide valuable insight into the rental market during this unprecedented time and it is important to consider what each source captures and how that fits into the bigger picture… The data shows that rent payment has remained healthier than some market participants anticipated throughout the crisis because renters are prioritising making their rent payments, even in financially stressed households.”
In the US, “Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers.”
An Independent British think tank, The Resolution Foundation, on the other hand, has found that private and social renters are bearing the cost of redundancies during the coronavirus recession. It is warning that more tenants are likely to fall behind with housing costs than people with a mortgage.
Nearly one in eight (12.5%) of private renters cannot now meet their housing costs in full, according to a new report – Coping with housing costs, six months on
This Resolution Foundation report, which is based on a survey of more than 6,000 adults in the UK, argues that some urgent measures are needed to protect households as the country enters a second lock down.
Despite some improvement in the UK labour market since the spring, says the report, housing costs continue to be a serious concern for many as workers struggle to cover rent and mortgage payments.
The report says that around 8% of private renters and 7% of social renters have lost their jobs since the start of the pandemic, compared to just 3% of those paying a mortgage.
Lindsay Judge, the research director at The Resolution Foundation, has said:
“As lockdown measures continue to ramp up around the UK, high housing costs are making the ongoing economic situation even worse for many families.”
The National Residential Landlords Association reports that up to 300,000 renters are still on the chancellor’s furlough scheme, which was set to end on Saturday 31 October, but is new set to be extended. This should bring some welcome relief in the short-term.
The Resolution Foundation is calling for tenants in England to be given interest-free government loans, similar to the schemes introduced in Wales and Scotland.