Industry News


Think tank warns Government that 400,000 people could be pulled into poverty by planned benefit changes


T


he independent Joseph Rowntree Foundation is warning that a planned real-terms cut to benefits in April could pull


400,000 people on low-incomes into poverty. It also warned that nine million families who


receive benefits will be £500 worse off on average due to inflation from April. Te majority of these are tenants in both the social and private sectors. Failure to act would make the Government responsible for a second cut to benefits in less than six months. Ensuring benefits keep pace with inflation


would help fill the gap leſt by inadequate energy price mitigation measures and prevent widespread hardship according to the JRF. New analysis reveals the stark consequences of


the Government’s decision to uprate benefits by just 3.1 per cent in April, when inflation is forecast to hit levels of between two and three times that level. Tis represents a real-terms cut to the incomes of


some of the poorest families in the country at a time when the UK’s main out-of-work support is already at a 30-year low following a decade of cuts and less than six months on from the £20 per week cut to Universal Credit. Tis is likely to push thousands more tenants


into serious rent arrears and at risk of eviction from their home by lanlords. Around nine million households on means-


tested benefits due to low incomes, both in and out of work, will experience an average real-terms cut


of £500 per year. Couple families with children in receipt of benefits due to low income will experience a real-terms cut of £720 per year, while the figure across all pensioner couples is £540 per year. For families on low incomes, a reduction in the


value of benefit levels that are already inadequate could not come at a worse time. Already, many families are going without the essentials. Te price of food and other basic items is rising, and the energy price cap could push the average bill towards around £2,000 from April, leaving many families deeply concerned about how they will manage to stay afloat. Te Government’s temporary support package in


response to rising energy bills has been criticised for failing to target sufficient levels of support to those most in need, and for its use of a loan scheme which risks delaying rather than alleviating the pressure on household budgets. Following the energy price cap rise, families on


low incomes face an average energy bill increase of £566 a year, meaning they will spend on average 16 per cent of their incomes aſter housing costs on energy bills. Te mitigations consisting of the council tax


rebate and rebate loan then claw-back will cover only 60 per cent of the increase for the average low- income family, highlighting the risk of widespread hardship if further action is not taken. Te planned real-terms cut follows a £1,000-a-year cut to the incomes of households on


Rental stock availability drops to below pre-pandemic levels


Research by a specialist property lending company has revealed that rental market stock levels have plummeted across the UK’s major cities, as a return in tenant demand has driven a rental market revival. Octane Capital analysed the level of rental stock


across 21 major UK cities and how this availability of rental homes has changed during the pandemic. Te research shows that during the final stages of


2019 and prior to the pandemic, there were a total of 82,726 rental homes available to tenants across these 21 cities. By the start of the pandemic in January 2020, this


had climbed to a total of 96,735 and this surplus continued to increase throughout the pandemic, hitting a high of 171,080 at the end of 2020. However, as restrictions eased, trickles of


tenant demand started to return until now with all


restrictions now liſted, the rental market seems to be making a full return to health. Te latest figures from Octane Capital showed that just 64,839 rental properties were listed across the 21 major UK cities in March. London has seen the largest return to form of


all cities when compared to the pandemic peak in available rental properties at the end of 2020. Te level of currently available rental homes has fallen by -74% across the capital, while Edinburgh (-69%), Aberdeen (-64%), Newcastle (-62%) and Cardiff (-59%) have also seen some of the largest reductions when comparing current levels to the highs seen in December 2020. CEO of Octane Capital, Jonathan Samuels,


commented: “Te rental market revival is in full swing and the decision to liſt all remaining Covid


6 | HMMApril/May 2022 | www.housingmmonline.co.uk


For families on low incomes, a reduction in the value of benefit levels that are already inadequate could not come at a worse time. Already, many families are going without the essentials


Universal Credit last October, in the face of widespread opposition including by many Conservative MPs. While working families saw some extra support through changes to the UC taper rate and work allowance, this did not fully mitigate the impact of the cut for all working families. Tose out of work, including people who have


lost their job, those seeking work and those who are unable to work due to sickness, disability or caring responsibilities, saw no mitigation and are £20 per week worse off following the cut. JRF is calling on the Government to uprate


benefits in line with the Bank of England’s forecast of 7% inflation by April as an immediate first step to help keep up with the rising cost of living.


protocols bolstered confidence, as tenants return to our major cities in their droves to both live and work. “Tis is extremely welcome reading for the


nation’s landlords who suffered greatly due to dwindling demand during the pandemic, forcing them to massively reduce their rental income expectations while also suffering from lengthy void periods. “It’s fair to say that we couldn’t find ourselves in


a more different place at present and if anything, there is now a shortage of suitable rental stock to meet this returning demand. As a result, we’re seeing sharp growth in rental incomes and while this won’t negate the impact of the last two years, it will certainly help steady the ship moving forward.” Earlier in the year the consultancy Capital


Economics predicted the UK will need nearly 230,000 new rental homes to avoid a shortfall if the current growth in demand continues, with subsequent increases of 227,000 homes a year to meet the demand for 1.8 million new households over the next decade.


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