100 tenants a day lose homes - the impact of benefit and buy-to-let changes on bottom-rung renters
New research from the Cambridge Centre for Housing and Planning Research for the Joseph Rowntree Foundation (JRF) has found that a 100 tenants a day are losing their homes. In 2015, 40,000 renters in England were evicted - the highest level on record.
More than 80% of the extra evictions were under a Section 21 notice, according to the research, where there isn’t necessarily any wrongdoing on the part of the tenant. It also found that changes to welfare benefits had had an impact, making private rents unaffordable in some areas - particularly across London and the South East.
Universal Credit is also putting landlords off renting to social housing tenants, because they are no longer receiving the money directly but reliant on tenants to budget for rent.
The study included interviews with private renters who are struggling to meet their bills - including those in work. A single mother in her 20s said: “I paid it as much as I could, but my youngest child has been quite sickly … If my kids are sick, I don’t get paid.”
Another man explained: “And then you’ve got the other bills…I just couldn’t make it work. I had to choose, what do I pay this month – do I pay the rent? Do I pay the electricity? Do I buy some food? And it just snowballed.”
Letting agency fees, the need for a guarantor and finding the cash for a deposit were all big challenges for these renters, who often would have preferred social housing but were ineligible, or at the bottom of a never-ending waiting list.
Campbell Robb, chief executive of JRF, said: “The stark figures and harrowing stories show the struggle people on low incomes face in the private rented sector. With higher rents, a benefits freeze and impossible choices about what bills to pay, evictions have reached record levels and put families under enormous strain.
“Tenants told us about the misery and insecurity they face. The government has made welcome moves to offer renters more protection. But it is intolerable that more than 100 families a day are losing their homes. The government must take immediate action on housing costs. This means lifting the freeze on housing benefit.”
A spokesman for the Department for Communities and Local Government said: “This government is determined to make rental housing more affordable and secure for working people. We are investing a record £7.1bn to boost affordable housing, and our housing white paper sets out how we plan to help private sector tenants, including building more homes for rent and banning letting agent fees.
“We continue to spend around £24bn a year to support the most vulnerable through housing benefit and we are providing 30% of the savings from the local housing allowance freeze to those areas with high rents.
“We have also changed the law to stop revenge evictions [when a landlord evicts in response to a complaint], given councils £12m to tackle rogue landlords and will give councils stronger powers to ban and convict the worst offenders.”
Alex Huntley, Head of Operations at Simple Landlords Insurance, added: “We know that bad landlords are in the minority. The truth is that even the good landlords are being squeezed by tax changes, stamp duty, tenant deposit caps, and more. We’ve seen landlords forced to put up rents to make their own numbers work.
“Landlords and tenants have a symbiotic relationship - you can’t legislate at one end and expect it not to impact on the other. It’s a balancing act, and at the moment it’s not working well for either party.”
Sarah Davidson, from This is Money, writes: “Every year Government departments bulldoze through hundreds of areas of public policy, making changes ranging from tweaks to complete overhauls of how we live. But what happens when these changes are not considered alongside each other?
“I think this is what has happened in the Government’s efforts to overhaul the benefits system while simultaneously transforming the buy-to-let market. And the lack of joined-up thinking looks likely to have disastrous consequences for the poorest people in society.
“Government … must address the very valuable role that private landlords play in the provision of social housing. Policies put forward cannot be considered in isolation, they must be seen in the context of other policy changes afoot across all Government departments.”
“Renting to tenants on benefits can still work for the right property in the right area,” insists Bindar Dosanjh, a Simple Landlords expert, founder of the Female Property Alliance and property mentor through Smart Core Wealth.
It’s all about running your numbers, long term capital growth, building personal relationships with tenants - and insuring for the worst case scenario. She continues: “Things can go wrong with any tenant. If you’re insured, you can put it right with the minimal amount of fuss or personal expense. Having specialist landlord insurance is essential - and a good insurer will help you find the right balance of cover to premium for your particular properties and tenants.
“Look into Rent guarantee and Legal protection, and consider taking out Malicious damage cover, which means that if your relationship with your tenants does turn sour and they take it out on the property - you can fix the damage. Always check your insurance policy to see if tenant references are part of your cover requirements - and double check you’ve got everything in place.”