A recent study has shown that the drastic increase of rents in the private rental sector (PRS) is forcing many low-income tenants to face making a choice between vital necessities. As it stands, current housing benefit rates do not appear to be covering the costs of paying rent, putting food on the table, and keeping the house heated.
The Chartered Institute of Housing (CIH) has warned that the freeze on the Local Housing Allowance rate, which came into effect during April 2016, will mean many will find themselves falling short of their rent each month. It has been speculated that even the areas with lower rent costs are still out of reach for those whose income just won’t stretch far enough.
Terrie Alafat, chief executive for the CIH, has commented: “Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents. We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.”
The CIH has stated the need to put an end to the four-year freeze, and has called on the government to take action. Matt Downie, the director of policy at the housing charity Crisis, said: “This report highlights just how much housing benefits for private renters are falling short of the levels needed, leaving many homeless people stuck in a desperate situation and putting yet more people at risk of homelessness.”
It was last year that the Residential Landlords Association (RLA) discussed the negative affects that this freeze was due to have on homelessness, brought about by ‘treating smaller landlords differently to Social Landlords’. It was originally going to affect those who living in supported and social housing, as well as those in the PRS. However, it was decided in the end that those in supported and social housing would not be included.
David Smith, Policy Director for the RLA, has commented on the CIH’s call to end the freeze: “Today’s report is a reminder of the difficulties being faced by young people especially in accessing homes for private rent.
“With many unable to afford a home of their own, and waiting lists for social housing remaining long, we need to do more to support those who desperately need a thriving private rental market to provide the homes they need and to sustain existing tenancies. This means lifting the Housing Allowance freeze so that it better matches the realities of today’s private rental prices.
“Such a policy would not lead to substantial increases in Government spending. Official data shows that in the year to July 2018, private sector rents across Britain increased by just 0.9%, far less than inflation.”