Industry News
Half of working renters are only one pay cheque away from losing their home
O
ne in two working private renters in England, some 3.2 million adults, would not have enough in savings to pay their
rent for more than a month if they lost their job, research by Shelter has revealed. Shockingly, 2.2 million renters (34%) would be
immediately unable to pay their rent from their savings if they lost their job. With tenants’ savings all but drying up, these are
some of the worst figures the housing charity has recorded since before the pandemic. In fact, the number of renters who are one paycheque away from losing their home is up by almost a third (31%) in just two years. Official data shows that private rents are at
a record high, and according to Shelter’s latest YouGov poll 55% of private renters have had their rent put up in the last year – putting immense strain on people’s finances. 2.1 million tenants (37%) are now struggling or behind with their rent due to the increase in payments. Shelter is arguing the only sustainable, long-
term alternative to expensive, unstable private renting is to build more social homes. In contrast with private renting, social housing offers long term secure tenancies with rents set at local incomes. Additional research by the charity shows the
benefits of social housing to local communities are significant with:
Shelter is arguing the only sustainable, long-term alternative to expensive, unstable private renting is to build more social homes
• More than three quarters of social renters in England (76%) say without their social home they would not be able to afford to live in their local area;
• 67% of social renters say where they live feels like a safe, stable, and secure home; and
• 53% say living in a social home enables them to stay close to family and friends.
Polly Neate, chief executive of Shelter, said: “Private renters up and down the country are facing a crisis like never before. Decades of failure from Government to build enough social housing means that the pressure on oversubscribed private renting is worse than ever.” “Te severe lack of social homes means swathes
of people are barely scraping by as they’re forced to compete for grossly expensive private rentals, because there is nothing else. With food and household bills continuing to surge, the situation is precarious for thousands of renters who are one
paycheque away from losing their home, and the spectre of homelessness.” “Te time for piecemeal policies is over. To jam
the brakes on the housing emergency we need a genuinely affordable alternative to private renting. We know social housing works for most people because it’s secure and the rents are tied to local incomes. Instead of empty words,the government and every political party must sign up to building thousands more social homes.”
Housing benefit fails to cover rent for 61% of households
New figures show 61% of households in England and Wales are seeing a growing shortfall between the benefit payments they receive and the rent they must pay. Te Local Housing Allowance (LHA) data,
released by the Department for Work and Pensions showed the number of households experiencing a shortfall was 52.8% higher in May 2023 than in April 2020, when LHA rates were frozen at September 2019 prices. Tis is the equivalent of 802,437 households, up from 525,088, with the average shortfall being £750 a year. LHA rates are used to calculate benefit payments
for housing costs. Historically rates were set at the average rental price for an area, with the sum regularly reviewed. However, the rate was reduced to the 30th percentile in 2011. Tey were frozen between 2016 and 2020 when
they were realigned to the 30th percentile once more at the outset of Covid. Tey have remained at this level despite rents going up by more than 10% on average.
Te news comes aſter analysis from the Joseph
Rowntree Foundation (JRF) suggested Local Housing Allowance rates now cover just 18% of the cheapest private rents. Te foundation analysed Government data to
arrive at the figure, with the Institute for Fiscal Studies claiming only 5% of private rental properties listed for rent on Zoopla in the first quarter of this year would be covered by LHA.
NRLA CAMPAIGN Te NRLA has been campaigning on the issue for some time, claiming the Government must reverse the freeze to support both the 38% of private renters in receipt of housing benefit, and the landlords housing them. NRLA chief executive Ben Beadle recently gave
evidence to a House of Commons Work and Pensions Committee, which launched an inquiry into the adequacy of working-age benefit levels in the UK earlier this year. He said: “Unless action is taken now to change LHA rates to reflect real-life
20 | HMMOctober/November 2023 |
www.housingmmonline.co.uk
rents there is a real risk that some of the most vulnerable tenants may fall into significant arrears or homelessness.” “Keeping Housing Benefit rates pegged to market
rents is vital – and the Government needs to carry out an impact assessment on its decision to freeze LHA rates this year as a matter of urgency, before determining rates for 2024/25.” As part of its welfare campaign the NRLA is
asking the Government for the following: • A reversal of the freeze on LHA rates – which should instead be aligned to at least the 30th percentile – based on today’s rents.
• Abolition of the five-week wait for Universal Credit payments.
• Payment of the housing element of Universal Credit in advance to better reflect rent payment cycles.
• Te replacement of the existing advance payment loan with a grant.
• Allowing housing benefit to be paid directly to landlords.
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