It might sound like a bad cartoon movie, but it’s becoming real life: the ‘unrentables’ are a subset of the 10 million renters in Britain, who find it increasingly hard to find a landlord that will rent a property to them. Impossibly high rents in some parts of the country mean more and more people in work are needing housing benefit (HB) to meet housing costs, a trend that shows no sign of slowing. Over a third (34%) of those claiming housing benefit in the private rented sector are now working.
Yet a National Landlords Association survey indicates that only a fifth of their landlord members are happy to rent to people in receipt of housing benefit. Recent media coverage showed that landlords are exiting the housing benefit market – which means evicting HB claimants, as Fergus Wilson did this week. The reasons Wilson put forward are economic – that it makes more sense for him to rent to non-HB claimants because he can charge them more rent, and they won’t miss payments. But the social implications of landlords refusing to let to any benefit recipient are stark, as one in five households are currently forced to claim housing benefit.
This gloomy picture raises the spectre of ‘benefit blackspots’ – areas where home ownership is a distant dream, and where families find that they don’t earn enough to rent privately without help, but are rejected by landlords who won’t let to them if they need a housing benefit top up.
It seems that landlords’ fear of non-payment of rent is being heightened by concerns and misinformation about payment options under Universal Credit. Under Universal Credit the majority of claimants will receive a single monthly payment, out of which they will have to pay their rent. The majority of those in the private sector already receive their HB this way under Local Housing Allowance – and there are protections in place where claimants struggle to pay rent in the form of managed payments to landlords. The DWP intend to replicate similar protections under Universal Credit for claimants who struggle to pay rent.
At the heart of this dismal phenomenon is an affordability problem. The combination of soaring housing costs, stagnant wages and benefit cuts make it inevitable that more and more ordinary people will struggle to find a decent place to live. And if they do find a home, keeping it will be a struggle. Shelter recently commissioned research by YouGov, and found two thirds of families with children who pay rent or a mortgage are currently struggling or falling behind with their payments, and that over a third of all people expect to struggle to meet their housing costs in 2014.
Families who are struggling to keep up payments or to find suitable accommodation need to take action themselves, and can get advice from Shelter (see england.shelter.org.uk/get_advice) on what to do.
But the government must also take action if we are to prevent families being locked out of the rental market by of high rents and poverty profiling by landlords.
We need:
- A guaranteed arrears trigger under Universal Credit, including a review after a month, and automatic managed payments for people who are going to struggle to pay their rent
- Clear and immediate communications with landlords to reassure them that protections will be in place under Universal Credit
- LHA rates which reflect market rents to ensure it is economically viable for landlords to let to HB claimants, who frequently can’t afford to top-up shortfalls
If action is not taken we risk locked out families becoming the housing blockbuster of 2014.