Analysis by the Institute for Fiscal Studies (IFS) has revealed that households on low incomes are being left particularly exposed to rental increases as housing costs eat up a growing proportion of their money.
According to the IFS, the proportion of people in Great Britain living in private rented accommodation has more than doubled, from 8% in the mid 1990s to 19% in the mid 2010s, while among 25- to 34-year-olds this proportion has trebled from 12% to 37%. Over the same period, average private rents have risen by 33% in real terms.
“Wider problems in the housing market are pushing up housing costs and increasing the size of the rented sector,” commented Agnes Norris Keiller, a research economist at IFS and an author of the report. “While these remain unaddressed there is likely to be an ever tougher choice: continue decoupling support for housing costs for those on low incomes from the rising cost of housing or change policy and accept further rises in the housing benefit bill. The current approach effectively places most of the risk of further rises in costs onto low-income tenants, and little on the housing benefit bill. While containing the cost to taxpayers, it leaves housing benefit vulnerable to becoming increasingly irrelevant with respect to its purpose – maintaining the affordability of adequate housing for those on low incomes.”
Around 1.9 million privately renting households (containing 4.8 million people) are entitled to less housing benefit than they would have been without reforms introduced since 2011, by an average of £24 per household per week. Reforms have also cut the entitlements of 600,000 social-renting households (containing 1.3 million people) by an average of £19 per household per week.
