The Joseph Rowntree Foundation has published a report on the serious problems facing renters in the private sector –Renters on low incomes face a policy black hole: homes for social rent are the answer. The report illustrates the problems facing many tenants in the private rented sector.
Yet the solution proposed is seriously flawed. For one thing it uncritically accepts the Government’s 300,000 housing target, despite the fact this target is way above any realistic target (more like 170,000 a year). It suggests that tenants would be better off if they transferred to social housing but to achieve this aim more houses should be built. What happens to the houses which the tenants are already occupying? As the problem is one of cost and affordability not supply then we do not need to build additional houses to support existing tenants.
A better option would be to transfer private sector housing to community sector housing in the long term, in the short term reducing private rents would be more appropriate.
As for housing targets, a higher proportion of the 170,000 needed each year should be geared towards social housing while cutting the numbers of luxury homes and limiting the use of property for second and holiday homes.
It is not right that the high cost of private renting is leaving almost one million families paying rents they cannot afford. This is leaving nine in ten of these families in poverty, with some family budgets more than £100 a week below the poverty line as a result. The Government’s current plans don’t come close to addressing the problem. There is an urgent need to ease the pressure on these families to reduce poverty, improve living standards and allow more people to save for their
The majority of the Government’s policy responses – Housing Benefit; the affordable rent scheme which lets properties at up to 80% of market rates; and homeownership products like Help to Buy, First Homes and the Mortgage Guarantee Scheme – are either not working for this group, or only working for a small proportion of them.
The homeownership products that form the cornerstone of Government housing policy are out of reach for the majority of this group: homes bought through Help to Buy would only be affordable to 2% of low-income private renters, and most of the current products, including the mortgage guarantee schemes and First Homes, are unaffordable to nine in ten low-income renting families. These products work for people already on the cusp of homeownership, but there is a policy black hole for lowincome renters.
Housing benefit plays a vital role in helping low-income households with their housing costs, but years of cuts and freezes have undermined its effectiveness. Around half of the 956,000 families paying rent they can’t afford receive Housing Benefit but are still
struggling. By itself, subsidising high private rents through the benefits system is not a sustainable solution to this problem. Housing Benefit costs the state around £30 billion a year, a large proportion of which goes to private landlords.
The Government must step up its housebuilding efforts to reach its target of 300,000 homes a year and must ensure that 30% of these are homes for social rent. In the near term, this would meet the needs of the 1.1 million households on the social housing waiting list, as well as people experiencing homelessness, and support the Government’s own aim to reduce homelessness and end rough sleeping this parliamentary term. Over the long term, it could lift 600,000 people who are renting privately out of poverty; provide more than half a million households with a home they can afford; and ease the pressures of high rents for the majority of the other half a million households paying rents they cannot afford, many of whom will be on social housing waiting lists.
For more: https://www.jrf.org.uk/report/renters-low-incomes-face-policy-black-hole-homes-social-rent-are-answer