The Residential Landlords Association (RLA) has revealed new information, showing that changes to the benefit system are to blame for the decade-long increase in homelessness from private rented housing.
This research, undertaken by the Policy Evaluation and Research Unit at Manchester Metropolitan University, has pinpointed Local Housing Allowance (LHA) as one of the key driving forces of homelessness from the private rented sector (PRS).
LHA was introduced in 2008, as a way of calculating Housing Benefit payments for low-income households.
Evidence from the Manchester Met research, as well as other sources, has highlighted an increase in the gap between LHA rates and rent prices. It is expected to continue to increase in the future. This gap has been reported to be more than £100 per month by a quarter of landlords questioned, in relation to the research.
Security of tenure was not found to be a cause of homelessness from the PRS, as evidence provided by the English Housing Survey shows that 90% of tenancies are actually ended by the tenant.
The research team found that LHA rates have a ‘double whammy’ effect on the increase of homelessness, as tenants in receipt of Housing Benefit are statistically more likely to have their tenancy end, than other tenant groups. Such households then struggle to find suitable and affordable accommodation in the PRS.
Tenants asked to leave their homes under Section 21 notices do so for a clear reason, the report highlights. Rent arrears, anti-social behaviour or damage to the property account for half of these notices. Other reasons commonly given include the landlord needing to take back possession of a property in order to perform a refurbishment or for sale.
The authors of the report argue that this “raises questions” about whether the use of Section 21 notices can properly be described as ‘no fault’ evictions. There is a call for further research, in order to clarify how and why landlords currently use Section 21 notices.
A review of the design and operation of the LHA has been called for by the report, as well as for councils to develop strategies to work with private landlords to encourage the supply of private rented homes at LHA rates.
Dr Chris O’Leary, Deputy Director for the Policy Evaluation and Research Unit at Manchester Metropolitan University and a co-author of the report, said: “Whilst current debate is focused on changes to the way that landlords reclaim possession of a property, this does not tackle reasons why they need to do so.
“With the demand for rented housing remaining high, our report calls for co-operation between councils, landlords and the Government to support and sustain tenancies.
“This includes ensuring that benefits reflect the realities of today’s rents and work is undertaken to prevent rent arrears building in the first place.”
David Smith, Policy Director for the RLA commented: “This report puts paid to the idea that landlords spend their time looking for creative ways to evict their tenants.
“Most landlords ask their tenants to leave to protect their property. It would be a bizarre business model indeed to search for ways to get rid of your customers.
“The private rented sector can play a key role not just in housing the homeless but preventing people becoming homeless in the first place. Action is needed on a number of fronts to boost the supply of homes to rent to meet demand and reform the benefits and the court system to give confidence to both tenants and landlords.”