Homeowners are coping better financially than renters during the coronavirus lockdown. This is despite the fact that both groups have seen their incomes hit by the pandemic.

Around 91% of homeowners have been able to cover all of their housing costs in recent weeks.

Only 8% have fallen into arrears according to research by the Resolution Foundation.

But renters in the private sector are nearly twice as likely to have fallen behind than their owner-occupier counterparts.

About 13% of renters are now dealing with outstanding home payments.

Why are homeowners coping better than renters?

The Resolution Foundation research found that homeowners entered the current pandemic with lower than average housing costs. They therefore have a bigger financial buffer than renters.

On average, homeowners spend just 13% of their income on housing, compared to 32% for private renters. 

Similarly, only 13% of those with a mortgage had no savings when entering the pandemic, compared to 23% of renters.

Homeowners have also been more successful at reducing their housing payments during these challenging times. Most of the homeowners who applied for a mortgage payment holiday were granted one.

In contrast, only half of those tenants who tried to negotiate a rent reduction with their landlords were successful.

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How have homeowner and renter earnings been impacted?

Renters and homeowners have also been affected differently in regards to job security. 

15% of private renters are likely to be furloughed. This is compared to only 11% of those with a mortgage.

5% of private renters are likely to have lost their job during the coronavirus lockdown. This is compared to just 3% of homeowners. 

Despite these facts, people with a mortgage are more likely to have lost income as a result of the coronavirus pandemic. 

This stands at 15% for homeowners compared with 12% of private renters.

What support is available for homeowners and renters?

The emergency support put in place to help those struggling because of the pandemic has been more beneficial for homeowners than renters.

Homeowners whose finances have been impacted can take a mortgage payment holiday. This means their payments are deferred and the interest they would have had to pay is added to the outstanding debt.

Use the mortgage payment holiday calculator below, powered by mortgageholiday.co.uk, to see how your monthly payments may be affected by a holiday, and to find out how to apply:

While the mortgage holidays were initially offered for just three months, they’ve since been extended until 31 October if necessary.

Lindsay Judge, principal research and policy analyst at the Resolution Foundation, said: 

“Renters are more exposed than mortgagors, who last week saw provisions made to extend mortgage holidays for a further three months.”

But the government has introduced emergency legislation preventing landlords from evicting tenants who cannot pay their rent for three months.

If tenants want to take a payment holiday, they must negotiate it with their landlord and agree a plan with them to make up any arrears.

Top three takeaways

  • Homeowners are coping better financially than renters during coronavirus lockdown. This is despite the fact that both groups have seen their incomes hit by the pandemic. 

  • Around 91% of those with a mortgage have been able to cover all of their housing costs in recent weeks with just 8% falling into arrears. This is compared with 13% of private renters who have fallen behind.

  • The majority of homeowners who have asked for a mortgage holiday have been granted one. But only half of tenants have successfully negotiated a rent reduction.

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