Research has highlighted that in recent years the risk of homelessness has surged in all tenures (CIH, NHF, Shelter, 2012); perhaps unsurprisingly, this has been linked to the economic downturn (Homeless Link, 2010). The Government’s spending reforms in respect of housing and welfare has been described as ‘radical fiscal retrenchment’ whereby public outlay has decreased to its lowest rate since 1945 (Nevin and Leather 2012).
Housing Options Survey
In November last year I forwarded a survey to all Local Authority Housing Advice Services (hereafter referred to as LAHAS’s) in England, just over two thirds responded. In a nutshell, LAHAS’s deal with statutory homeless applications, housing advice, and homelessness prevention services. To be owed a main housing duty a service user must satisfy the LAHAS that they are vulnerable in some way, for example due to a serious health issue or dependent children (usually referred to as being in ‘priority need’).
The remainder of this post focuses on the survey results relating to private rented accommodation. If a service user approaches LAHAS’s at risk of homelessness and has no identified vulnerability, it is unlikely that the authority will have any duty to provide them with housing; for this reason private renting is increasingly becoming the only viable option for this group. 85% of respondents stated that a lack of available private rented in their area was adversely affecting their ability to help people threatened with homelessness, and 9 out of 10 also cited local housing allowance (LHA, hereafter) cuts, which effect affordability.
In most cases a deposit and rent in advance is required for the first month if someone requires private rented accommodation, sometimes estate agent fees can be added on top of this. Further, if the person will be claiming housing benefit a landlord has to be willing to accept this. Many LAHAS’s have set up rent bond schemes (this is a paper guarantee provided to a landlord instead of cash, which itself, may not be acceptable to some landlords), and rent in advance payments. Not all LAHAS’s provide these services, and even for those who do eligibility criteria varied. It was found that applicants receive a differing service dependent on where they live, thus becoming victim to a postcode lottery of sorts. Below I have listed some of the main findings in respect of both rent schemes:
Rent bond scheme:
- Most LAHAS’s (94%) offered the rent bond scheme, of these 95% stated that a service user would need to meet specific criteria to be eligible.
- In just under half of cases (46.5%) applicants would only be eligible if they were deemed to have a priority need.
- In one fifth of cases LAHAS’s required local connection (usually determined by assessing if an applicant has had settled accommodation for a period of time or employment in the area) as well as a priority need, and one fifth specified that an applicant must also not have caused their homelessness in addition to these 2 requirements.
- Local connection appeared to be the most important attribute, and this was required as a minimum by 9 out of 10 authorities.
Rent in advance:
- Rent in advance in many cases had a stricter criteria, this may be because LAHAS’s need to finance it upfront, as opposed to offering a guarantee (as is the case with the bond scheme).
- Nearly a quarter of LAHAS’s did not offer rent in advance as a prevention initiative.
- Of the LAHAS who did provide this service 97% of respondents stated that specific criterion was required to be eligible for a payment. Around two thirds expect as a minimum that an applicant will have a priority need, and 82% cited local connection.
Assuming a given service user meets all other tests (such as local connection) a rent bond is only available to non priority groups in half of all responding LAHAS’s, the corresponding figure for rent in advance is less than one fifth. These figures suggest that private rented accommodation is likely to be out of the reach for many who have no priority, and this will be further compounded for those without local connection. Even for those who are eligible, it is still problematic to actually access this type of accommodation.
Research has identified that following the introduction of LHA (which is normally paid directly to the tenant) landlords became more reluctant to rent out properties to tenants who claimed it (Stares, 2010). Moreover, it has been established that over 75% of private landlords plan to reduce the number of properties they will let out to tenants’ who claim LHA in light of recent amendments that have reduced the amounts payable (National Landlord Association, cited by Kelly, 2012). It was found that homelessness due to losing a private tenancy had increased from 15% to 20% of the national homelessness figures between the first quarter of 2011 and 2012 (The National Housing Foundation, 2012), and that court orders granted to landlords to evict tenants has risen 70% in the past 3 years (Crisis, 2012b). Lister et al (2011) predicted that if the current trajectory continues unabated private rented accommodation in all LA’s in England will become unaffordable to those on a low income. Unsurprisingly it has been argued that these factors will lead to an even greater increase in homelessness (Crisis, 2012a), and thus an inevitable rise in demand for LAHAS’s (Pawson and Wilcox 2011, pp. 38-39).
Campbell Robb, Chief Executive of Shelter (cited by Wellman, 2011), has argued that as private renting is progressively become the only option, as home ownership and social housing become less viable (CIH, NHF, Shelter 2012, p. 26), it is imperative that the Government take action to lessen the financial burden; yet no such measures are evident.
Hopefully the qualitative interviews will shed more light on what needs to happen to ensure that private rented schemes can provide a viable option and prevent homelessness. But what seems clear from this early stage is that the Government must address the real issue that housing difficulty is increasing due to financial insecurity and lack of available suitable accommodation. The Housing Minister Mark Prisk (Parliament, 2012) suggested that a renewed vigour toward prevention is key to rising homelessness, yet without committing adequate resources to this area it is difficult to see how the tide can be turned.
CIH NHF Shelter (2012). “The Housing Report Edition 2, May 2012.” Retrieved 19 May 2012, from: http://www.housing.org.uk/publications/find_a_publication/general/housing_report_edition_2,_may.aspx
Crisis (2012a). Crisis Policy Briefing Housing Benefit cuts. London, Crisis.
Crisis (2012b). “Private tenants see eviction orders soar.” Retrieved 14 August 2012, from http://www.crisis.org.uk/news.php/492/private-tenants-see-eviction-orders-soar.
Kelly, L. (2012). “Live Discussion: How Should the Council Work with Landlords.” Retrieved 16 January 2012, from http://www.guardian.co.uk/housing-network2012/jan/13/councils-private-rented-housing-discussion?CMP=.
Lister, S., L. Reynolds, et al. (2011). Research report The Impact of Welfare Reform Bill measures on affordability for low income private renting families. London, Shelter.
Nevin, B. and P. Leather (2012 ). Localism, Welfare reform and housing market change: identifying the issues and responding to the challenge, a report for NASH. London, Nevin Leather Associates.
Parliament, C. H. (2012). “House of Commons oral answers to questions: Homelessness.” Retrieved 11 January 2013, from http://www.publications.parliament.uk/pa/cm201213/ cmhansrd/cm121217/debtext/121217-0001.htm#1212174000024.
Pawson, P. and S. Wilcox (2011). Housing Review 2010/2011. Coventry, Chartered Institute of Housing.
Shelter (2012). Retrieved 11 January 2011, from www.shelter.org.uk.
Wellman, A. (2011). “Private Rents ‘Unaffordable’ in most of Country.” Retrieved 13 October 2011, from http://www.insidehousing.co.uk/tenancies/private-rents-unaffordable-in-most-of-country/6518346.article.
By Sarah Alden
You can find out more about Sarah on our contributors page.