A new report, commissioned by the Residential Landlords Association, yesterday warned that under-35-year-olds will have difficulty finding privately rented accommodation as landlords cut back on renting to young people.
The report, by researchers at Sheffield Hallam University, surveyed 1,996 private landlords around the country. It found that nearly one-third of landlords have changed their letting strategies over the last three years. Of these, 32% have actively sought to decrease their lettings to under-35s.
The situation is worse for young people who are on housing benefit or Universal Credit. Of the landlords that have reduced lettings to young people, 87% have stopped letting to those on housing benefit. In fact, the survey found more than two-thirds of landlords (68%) now are unwilling to let to under-35s on housing benefit or Universal Credit.
Why? The most commonly cited reason by landlords was higher risk of rent arrears. Consequently, nearly half of landlords are making greater use of guarantors as the benefit system itself fails to provide the guarantee it once did. One landlord told the researchers: ‘I will still consider accepting DSS [housing benefit] tenants but will want a proper guarantor or clear evidence that they are embarking on a work path that will lead them to financial independence so that they can pay their own rent in future.’
This shift in attitudes comes amid dramatic changes in the welfare landscape for young people. Since 2012, single people aged under 35 have been limited to claiming only enough housing benefit to cover a room in a shared house. This has limited the accommodation options for under-35s and forces some people into shared housing when it may not be suitable for them.
Meanwhile, the actual amount of housing benefit available to all age groups has decreased in real terms as the freeze on Local Housing Allowance has taken hold. Young people on low incomes are therefore having to top up more and more to make up the rent with money they don’t have. For example, in Warrington, a single person living in a shared house would be expected to top up £233 a month to cover the shortfall between their housing benefit and the rent. In Oxford, a young person would have to find an extra £219 a month to pay for their room.
Most recently, the government removed the automatic entitlement of 18-21-year-olds to housing benefit. While there are welcome exceptions to this policy, we still think it presents an unnecessary risk and will mean some young people will have nowhere else to turn but to the streets.
The shrinking availability of housing for young people has consequences that are deeply worrying. According to Homeless Link, young people make up nearly half of people using homelessness accommodation services. And young people are spending double the length of time in homelessness organisations because they cannot find housing elsewhere. Figures show that more than one-third of rough sleepers in London are aged 35 and under.
What this report highlights is an urgent need to make sure that there are housing options for young people, especially for those on low incomes. This should start with immediately lifting the freeze on Local Housing Allowance so that a greater proportion of the market is accessible to those that need help with their rent.
The freeze was intended as an intervention in the market to stop private landlords raising their rents. But the research shows that far from stalling rent rises, the freeze has instead encouraged landlords to turn away from renting to low-income tenants and in favour of higher earners. And with every additional cut to housing benefit, this group looks like a riskier cohort to let to.