Write The Week – The importance of being able to call a house a home
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‘Write the Week’ is a weekly blog written by our Remote Generalist Adviser Maya throughout the 2024 election campaign spotlighting the key issues that need to be addressed by politicians.
Week 2: The importance of being able to call a house a home
In last week’s blog post, I discussed the biggest symptom of the cost-of-living crisis – negative budgets. But, in order to really understand the cost-of-living crisis, we need to probe further and look at what it is that is pushing people into the red. Citizens Advice has determined that housing costs are a major contributor to negative budgets. Through the lens of negative budgets, this week’s blog post will focus on unaffordable and unstable housing in the private rented sector, demonstrating the urgency with which these two iterations of the housing crisis need to be addressed if we are to end the cost-of-living crisis.
On average, private renters on a low income are spending almost half of their income on rent alone. And for those in a negative budget this soars to nearly two-thirds, highlighting the correlation between housing costs and negative budgets. In South Gloucestershire alone we helped 47 people with issues relating to affordability and rent increases in the private rented sector during the financial year 2023/2024, compared to just 11 in the preceding financial year. And two months into the current financial year, we have already helped 14 people with cases relating to affordability and rent increases. This is clearly a growing issue.
Whilst high rent costs are affecting all private renters, those with the lowest incomes are suffering more. The group feeling the effects most acutely are those who rely on Housing Benefit (HB) or the housing element of Universal Credit (UC), both of which are capped by the Local Housing Allowance (LHA). The LHA rates are often frozen, meaning that the shortfall between people’s private rent costs and the money they receive grows exponentially. And despite an increase in the LHA rates in 2024, they are still not high enough and are expected to be frozen again in 2025. People are therefore pushed into debt just trying to keep pace with rent. And not being able to afford rent puts people at risk of losing their house altogether.
But affordability does not exist in a vacuum; it interacts with other elements of the housing sector to pull people into a whirlwind from which it is impossible to escape. To fully grasp what is happening, we first need to understand just how easy it is for private renters to be evicted. A section 21 notice is a ‘no fault’ eviction notice that can be served on a private tenant at any point during a periodic tenancy and at certain times during a fixed-term tenancy. When this happens, tenants are obligated to leave the property within two months. This means a person’s home can be taken from them at any moment. In 2023 Citizens Advice helped 18,000 people nationally with section 21 evictions. In South Gloucestershire we helped 28 people in the financial year 2023/2024, compared to just 15 in the previous financial year. And already this year we have helped 12 people with section 21 evictions. This increase, like the increase in the number of people South Gloucestershire is seeing for affordability and rent issues, is staggering.
Yet more alarmingly, rent costs for new tenancies are up 10% from last year. The overall average rent inflation is much lower at 6.2%. What this means for those on the receiving end of a section 21 eviction notice is that they are facing much higher rent costs in any prospective tenancy. This is particularly worrying for those people who rely on HB or UC to pay their rent because they will have to find more extra money to bridge the gap, which will only push them further into the red. Again, people are at greater risk of losing their home. It is clear that the various facets of the housing crisis are inextricably linked and prevent people from being able to say that their living arrangements are secure.
People in the private rented sector are experiencing compounding difficulties. One client living in a privately rented property said: “I’m worried about rent increases and if I can afford to stay in my home – other rental properties are more expensive than mine…which will mean spending less on essential items like heating”. Shelter describes a person’s home as the foundation of their existence, supporting health and wellbeing, but it is clear that the current unaffordability and instability is making people’s lives more difficult rather than less. At present, private renters are unable to call their house their home.
Ultimately, you cannot fix negative budgets without tackling the country’s housing crisis and any incumbent government will need to act swiftly to change its trajectory. At Citizens Advice we are in the business of solving problems, and so we are asking prospective parliamentary candidates to commit to implementing the following proposals if they get into government –
- Create more social housing – using the National Red Index to model what could happen if you moved all private renters on means tested benefits into social housing, Citizens Advice found that 211,000 households, or almost half a million people, would be lifted out of a negative budget.
- Reform the Local Housing Allowance – permanently fixing the LHA rate to market rents, starting at the 30th In the 2023 Autumn Statement, the government announced that LHA rates would be restored to the 30thpercentile in 2024, lifting 58,000 people in private rented housing out of a negative budget. But LHA is set to be frozen again from 2025, meaning gains made will soon be lost if private rents continue to rise as they have been.
The question for politicians this week is the following: will you introduce policy changes to create a housing market that serves private renters within the first 100 days of your tenure?
