One of the biggest shifts that we have seen in poverty over the last decade has been the near doubling in the number of private renters in poverty.
Around 2.2 million people who rented their home from a private landlord lived in poverty in 2003, but by 2013 that number had soared to more than 4 million – with most of the new cases made up from working families. During the same time, the number of social renters in poverty fell by 1.1 million and homeowners by 500,000.
Part of the reason is the growth of private renting. As house prices have climbed and people have been priced out of the market, the number of privately rented homes grew from 2.2m to 3.9m during the same 10 years (2003-2013).
This shifting mix of poverty brings a new set of problems. The most obvious way the private rented sector stands out is the higher rents. Typically a private renter will spend about 31% of their income on housing costs compared to 15% for homeowners and 19% for social renters. For the poorest fifth of private renters this rises to 55%. With a growing number of people in poverty having to pay full-market prices for housing, these rents become a major issue in pushing people below the poverty line.
But the housing problems for private renters do not stop at affordability: quality and security are also crucial. Private renters, particularly those in poverty, are more likely to live in a home that is non-decent or has damp problems. There has also been an increase in the number of tenancies ending in repossessions and homelessness: 14,000 households became homeless when their tenancy agreement was terminated in 2013-14, double the number recorded five years earlier. The number of repossessions by the landlord has grown from 10,000 to 17,000 in the same period.
All this has consequences for the state. As more people live in the private rented sector who cannot afford to, the government supports them through housing benefit. The growing number of repossessions has implications in terms of court costs and expensive temporary accommodation.
The response of the current government has been focused on reducing the housing benefit bill by lowering the amount of financial support private renters can claim, and capping its increases below inflation. The aim of this was to slow down the rise in rents but it is not yet clear this has happened. Yet no policies have been offered that deal with the problems of insecurity and quality of the private rented sector, nor have they puts the onus on anyone but the individual tenant.
Regardless of income or tenure, people should have a home and not just somewhere to live. This means a property in adequate condition, at a predictable and affordable cost in the long term. More attention should be given to tacking these problems of quality and security along with affordability. And the responsibility for these problems should not just lie with the state and the tenant, but the landlord as well.
- Even renters who work should be worried about housing benefit changes
- How can you slow the unstoppable rise of evictions?
- Politicians just don’t understand what it’s like to be a renter
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Let’s stop the scourge of revenge evictions
Hannah Aldridge is a senior researcher at the New Policy Institute. The New Policy Institute’s research on poverty and social exclusion can be found here.
