The affordability barrier
This content applies to England only.
While those on higher incomes may find renting privately an affordable and flexible alternative to buying their own home, the situation for those on low incomes is very different.
Shelter believes that urgent action is needed to help people on low incomes find an affordable place to live, and to prevent those struggling to keep up with their rent from losing their homes.
Problems faced by households on a low income
Low income households often find it difficult to afford decent privately rented accommodation, which becomes a major housing issue when no social housing alternative is available.
In addition to struggling to pay the rent, tenants on a low income may also have difficulty paying the additional costs involved in renting privately. Tenants are frequently required to pay hefty deposits, and may be asked for extra charges for reference checks, inventory costs, cleaning costs and check out fees. To make matters worse, the short-term nature of private tenancies means that tenants may find themselves facing these additional costs on a regular basis.
Problems faced by people on benefits
For tenants on housing benefit or local housing allowance, much of the accommodation in the private rented sector is simply unaffordable. Nearly half of private renters receiving local housing allowance face shortfalls - averaging nearly £100 a month - between the amount they get and the rent they have to pay. [1] This has a big impact on families struggling to pay the bills. Some tenants whose benefit doesn't cover the rent regularly go without meals to keep a roof over their heads.
This situation is particularly difficult for young single people under the age of 25. Government rules for housing benefit mean that they are only awarded enough housing benefit to cover the cost of a single room in accommodation with shared facilities. To make matters worse, this sort of accommodation is often not readily accessible to many young people, leaving them with a stark choice between homelessness or having to pay for rent shortfalls out of the limited other money they can access. This leaves - what are often vulnerable - young people struggling financially.
The Government's Emergency Budget proposed a number of new restrictions on the amount of housing benefit that private renters receive. With many housing benefit claimants already struggling financially, this is likely to push people over the edge, triggering a cycle of rent arrears, eviction and homelessness. Many households will also be forced to move, often into overcrowded or sub-standard accommodation.
Shelter's view
Shelter’s campaigning has already led to the Government making tenancy deposit protection schemes a legal requirement. As a result, it is much harder for unscrupulous landlords to deduct spurious costs from tenants' deposits.
There is still much work to be done and, given the current shortage of social housing, the private rented sector urgently needs to be made an affordable housing option to households on low incomes.
Shelter calls on the Government to:
- Amend its proposals to reform housing benefit to mitigate the impact on the hardest hit, and to ensure that all claimants can afford a decent place to live.
- Make all landlords and letting agents advertise any fees charged in plain English and stop unreasonably high additional costs.
- Encourage all councils to offer deposit guarantee schemes, to help private tenants who are unable to afford to pay a deposit
