Report shows combination of low wages, freezes to be
More than a million households living in private rented accommodation are at risk of becoming homeless by 2020 because of rising rents, benefit freezes and a lack of social housing, according to a devastating new report into the UK’s escalating housing crisis.
The study by the homelessness charity Shelter shows that rising numbers of families on low incomes are not only unable to afford to buy their own home but are also struggling to pay even the lowest available rents in the private sector, leading to ever higher levels of eviction and homelessness.
The findings will place greater pressure on the government over housing policy following the Grenfell Tower fire disaster in west London, which exposed the neglect and disregard for people living in council-owned properties in one of the wealthiest areas of the capital.
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The Shelter report highlights how a crisis of affordability and provision is gripping millions with no option but to look for homes in the private rented sector due to a shortage of social housing.
Shelter says that in 83% of areas of England, people in the private rented sector now face a substantial monthly shortfall between the housing benefit they receive and the cheapest rents, and that this will rise as austerity bites and the lack of properties tilts the balance more in favour of landlords.
Across the UK the charity has calculated that, if the housing benefit freeze remains in place as planned until 2020, more than a million households, including 375,000 with at least one person in work, could be forced out of their homes. It estimates that 211,000 households in which no one works because of disability could be forced to go.
Graeme Brown, the interim chief executive at Shelter, said: “The current freeze on housing benefit is pushing hundreds of thousands of private renters dangerously close to breaking point at a time when homelessness is rising.”
A total of 14,420 households were accepted by local authorities as homeless between October and December 2016, up by more than half since 2009 – with 78% of the increase since 2011 being the result of people losing their previous private tenancy. Local authorities are under a legal obligation to find emergency accommodation, such as in bed and breakfasts.
Graeme Brown, the interim chief executive of Shelter. Photograph: PR
In its report “Shut out: the barriers low-income households face in private renting”, to be published on Monday, Shelter calls for the freeze on the local housing allowance (paid to those renting privately) to be lifted immediately. The same demand has also been made by the Local Government Association, the Joseph Rowntree Foundation and the Chartered Institute of Housing.
While the Conservatives are under pressure to ease back on austerity, (including the caps on benefits and public sector pay)Theresa May has said nothing to indicate she would end the housing benefits freeze. Labour has suggested it would do so as part of a £10bn plan to inject greater fairness into the system.
“There is an assumption in housing policy that the private rented sector will be the default tenure for those priced out of homeownership or unable to secure a social tenancy, but this is increasingly not working,” it says. “As the social rented sector contracts, private housing may have replaced it as the main tenure for people in housing need. But the market’s limitations mean that significant government intervention is needed if it is to play an expanded role in preventing homelessness and housing people on low incomes.”
Shelter says landlords are becoming choosier about who they rent out properties to, with many refusing to take those in receipt of benefits. Delays in payment have made them more reluctant to take on people they cannot rely on to pay up promptly.
Other factors make it near-impossible for many on low incomes to find the money to start a private tenancy. “The upfront cost of private renting prohibits low-income households from accessing the private rented sector and means that many are forced to borrow, starting a tenancy in debt,” says Shelter.
“For households experiencing multiple moves, the repeated costs of fees, deposits and rent in advance can pull them further into debt. Our advice services tell us that private landlords are increasingly asking for guarantors, who can be difficult for low-income households to secure.” London has seen some of biggest rent increases since 2011-12, with the cheapest average rents rising on average by 6% a year for one- and two-bedroom properties. In Bristol, average rents at the lowest end of the market have also risen 6% a year for one-beds and for two-beds. In Luton, one-bed and two-bed rents have increased by 5% annually.
Nationwide, the increase in rents is starkest for rooms in shared houses, with rents increasing by nearly 4% annually over the time period. In London, rents for rooms in shared houses saw annual increases of 7%. A review by the Smith Institute citing a council officer saying that rooms in the private rented sector that had previously been used to meet housing need were now being rented out to young professionals who were able to pay the far higher rents.
By December 2016, nearly 76,000 households were living in emergency temporary accommodation such as bed and breakfasts, of which 60,000 were families with children or pregnant mothers. This is more than 10% up on the previous year and 58% more than in 2010 when just over 48,000 households were living in temporary accommodation.