Benefit gaps put half a million working renters at risk
Researchers have warned that the growth of the rental sector, combined with possible post-EU referendum rises in unemployment, could create a “toxic cocktail” for tenants who may find they are not eligible for housing benefit or that it may not fully cover their rent.
Former pensions minister Steve Webb, who conducted the research for Royal London, said there had been a steep rise across the UK in the number of working people who would potentially be at risk of being unable to meet their rent if they lost their wage through unemployment or sickness.
The report said that 510,000 renters in Yorkshire and the Humber were thought to be at risk in 2013/14 - arise of 350,000 in a decade. The only regions with higher numbers at risk were London, the South East, South West, and North West. Across the UK, 5.5m working adults - almost three quarters of working renters - would not qualify for full housing benefit if they lost their job.
Rising house prices have left many people facing the prospect of renting for longer. In 2013-14 around 7.7m working adults were living in rented homes, nearly doubling from the 4m who were in this situation a decade earlier.
Mr Webb, who is now director of policy at Royal London, said: “Renting has gone from being a transitional phase that younger people do before buying to something that more couples and families do for the longer term.”
Finding you are suddenly have to move elsewhere could pose particular problems for families with established links to a particular area, such as their children being at school there.
The report found more than 1m children could be at risk of their family having to move home because of gaps in the benefits system if a parent were to suffer a loss of income.
Mr Webb added: “This report shows that the benefits system would not meet the rent of the majority of working renters. Unless they are able to resume paid work quickly, 5.5m working renters would be at risk of not being able to pay the rent and having to move to cheaper accommodation, if they could find it.”