Affordable private rents represent a minority, with just 5% available for individuals receiving housing benefit, according to a newly released report.
In the current economic climate, the demand for affordable properties is on the rise, according to the Institute for Fiscal Studies. This is particularly true in the private rental sector, where affordable properties have become increasingly scarce.
A recent study has revealed that affordable properties in the private rental sector have 19% higher heating and hot water costs compared to the average, a gap that has widened as rents have increased. These homes are also harder to heat, leaving renters facing energy bills they struggle to afford.
The private rental sector has become a crucial part of understanding poverty, as it has filled the gap left by decreasing homeownership rates among low-income families since 2008. Younger low-income individuals are especially likely to be living in private rented accommodation.
The proportion of new private rental properties affordable to housing benefit or Universal Credit recipients has plummeted from 23% to 5% since the freeze on Local Housing Allowance (LHA) was implemented. The LHA rates, which determine the maximum rent support for low-income private renters, have been frozen in cash terms since April 2020. As a result, rents for new private rental properties have increased by more than a fifth on average.
One in twenty newly listed private rental properties could be covered by housing benefit, a stark contrast to the past. Renters, especially in the private sector, face higher rates of poverty and lower living standards compared to homeowners.
The decline in affordable properties has been felt nationwide, with the share of affordable properties ranging from 2.5% in Wales to 6.9% in the North East. Low-income families in private rented properties are more likely to live in homes that are hazardous, in disrepair, difficult to heat, or lacking modern facilities compared to social renters or owner-occupiers.
Around a quarter of private rented homes occupied by low-income people would fail the Decent Homes Standard, compared to 18% of owner-occupied homes and 12% of social rented homes. The minister responsible for the decision to fix the Local Housing Allowance as a monetary amount since April 2020, resulting in only one-fifth of new rental properties being affordable for welfare claimants, is not explicitly named in the provided search results.
The Joseph Rowntree Foundation, a leading social change organisation, funded the research mentioned in this article. It is crucial that the government unfreezes LHA and ensures it reflects market rents so that families aren't forced to choose between homes that are unsafe or homes they can afford. If the benefit freezes are maintained, private rents will become increasingly unaffordable for those on low incomes.
In conclusion, the private rental sector is facing a crisis of affordability, with many low-income families struggling to find homes they can afford that are also safe and well-maintained. The government must take action to address this issue and ensure that the Local Housing Allowance reflects market rents.
