Renters on low income struggle to find affordable properties

Renters on low income struggle to find affordable properties

0:03 AM, 29th June 2023, About 11 months ago 4

Text Size

People receiving housing benefits or Universal Credit can afford just one in 20 private rental homes, according to new figures.

Research by the Institute of Fiscal Studies (IFS) reveals since the Local Housing Allowance (LHA) freeze, the proportion of new private rental properties on Zoopla that would be covered by LHA has plummeted from 23% to 5%.

The government has frozen LHA rates since April 2020.

The government’s freeze on LHA is unsustainable

The Joseph Rowntree Foundation which co-authored the report reveals the quality of affordable properties has dropped and those on low incomes are more likely to end up in homes with higher heating costs.

Darren Baxter, principal policy adviser at the Joseph Rowntree Foundation (JRF), says: “Private renters on low incomes are seeing the number of properties they can afford shrink dramatically as housing benefit fails to keep pace with soaring rents.

“Clearly, the government’s freeze on local housing allowance (LHA) is unsustainable.

“Even if renters can find somewhere affordable to live, it’s likely to be a home that’s unsafe or in disrepair. These homes are also harder to heat, leaving renters facing energy bills they just can’t afford.

He added: “As more people on low incomes rent privately, it’s 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.”

Private rents will become increasingly unaffordable for those on low incomes

The IFS says the decline in accessible homes had been felt across Britain, with the share of affordable properties for benefit claimants ranging from 2.5% in Wales to 6.9% in the North East.

The report also finds that rents have raced ahead of housing benefit entitlements as rents for new lets have risen by over a fifth on average.

Tom Wernham, a research economist at IFS, warns that rising rents will hit people on low incomes the hardest.

He said: “Compared with homeowners, renters in the social and private sectors face higher rates of poverty and lower living standards.

“If these benefit freezes are maintained, private rents will become increasingly unaffordable for those on low incomes.”

Share This Article



10:08 AM, 29th June 2023, About 11 months ago

This is sad news, people need affordable good quality shelter.

Interest rate hikes are affecting low income earners, many landlords are suffering too and as a consequence this story.

Trying to reduce inflation by hurting a few!

Where does it end?


10:10 AM, 29th June 2023, About 11 months ago

This is a government-manufactured problem: it's not just interest rates driving up rents. It's also the tax system and the other obligations being imposed upon landlords that drive up costs, drive up rents, drive landlords out and exacerbate the problems with supply.

The government needs to sort out the EPC system, allow us to deduct our finance costs from income, and allow us to invest our SIPPS directly in private residential property, even if that's only in houses at the upper end of a reformed EPC system.

Some poorer tenants may well be better off in poorly insulated, cheap rural properties that don't even make band D but have alternative sources of heating. But at some point under the government's current plans the government is going to stop tenants renting them.


14:50 PM, 1st July 2023, About 11 months ago

Spot on Beaver.
I came to London and shared a rough room with friend in the mid 80s for £25 a week in Tottenham. Days of cheap rental homes are being pushed out in favour of box ticking flats nobody can afford.


15:29 PM, 1st July 2023, About 11 months ago

Beaver and Cashcow
I agree the Government are to blame and of course the likes of Shelter who seem to think they are helping tenants.

I also rented a cheap no frills room when I came to London and the property my tenants occupy today would have been a pipe dream back then.
They should look at what happened in
Ireland when the Government decided that every bedsit had to have facilities such as wash basins etc. This put a lot of landlords out of business, rents went up and the homeless population quadrupled.
If it is not broken dont try to fix it!

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now