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Low-income tenants face ‘housing black hole’ says Zoopla

Zoopla is warning that low-income renters across England are facing a ‘housing black hole’ due to soaring rents and the freeze on housing benefit.

In a report prepared by the portal and homelessness charity Crisis, Zoopla says that with evictions on the rise and homelessness numbers climbing in England, the cocktail of high rents and low rental supply may make the situation still worse. 

The research finds that, at the start of 2022, one in four private renters in England were reliant on housing benefit to keep a roof over their heads. 

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By contrast, new analysis of Zoopla listings data finds that fewer than one in eight properties available for rent last year were affordable to those in receipt of housing benefit. 

The research - assessing new property listings for one, two and three-bed properties across England between May 2021 and April 2022 and their affordability compared to housing benefit rate - shows average monthly rental prices are now 12 per cent higher than before the pandemic.

However housing benefit has remained frozen since March 2020 and is based on rents from 2018-19. 

Zoopla says that in May of this year, the Boris Johnson government committed to increase other means-tested benefits in line with inflation in April 2023, but has so far ignored housing benefit. 

The report also reveals that the shortfalls between housing benefit payments and rents are more than double the amount recent government figures suggest with low-income renters being forced to find, on average, an additional £648 for a one-bed, £1,052 for a two-bed and £1,655 for a three-bed per year. 

The problem is most acute for one-bed homes with the analysis showing that in almost 50 per cent of local authorities, fewer than 20 such properties listed were affordable to people receiving housing benefit in the last year. This is despite 44 per cent of private renters being singles or couples with no children and for who a one bed property would be the most suitable. 

Crisis and Zoopla are calling on the government to urgently invest in housing benefit at the autumn budget if it wants to prevent thousands from being pushed into homelessness.  

Richard Donnell, executive director at Zoopla, says: “The gap between housing benefit levels and actual rents is widening as demand for rented homes outpaces supply. There is a greater supply squeeze in the rental market than the sales market. This is being compounded by a growing number of private landlords exiting the market in the face of tax changes and greater regulation, a trend that looks set to continue. 

“The challenge for national and local government is to encourage more supply across all tenures and a policy environment that continues to attract new investment into the rented sectors.”

And Matt Downie, Crisis chief executive, adds: “We cannot sit idly by as people are left to battle against an increasingly turbulent and suffocating rental market while housing benefit - the only lifeline they have - is patently insufficient and unable to meet their needs. 

“Enough is enough. The government can no longer ignore rising rents in the cost of living crisis - it must urgently invest in housing benefit so it covers the cheapest third of rents and put in place a plan to deliver the social homes we are crying out for, if people are to have a fighting chance at finding a home they can afford.”  

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    The downside of increasing LHA is that IMO it pushes all rents up. The answer is to build more social housing - but that has been the problem for years with no-one addressing it.

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    Why would it push all rents up?
    Affordability referencing
    dictates what non benefit claimants can afford.
    LHA rates are currently way below the prices of available rentals on Rightmove. There is currently only one one bedroom property listed at LHA or below in the entire city where I operate. The cheapest 2 bed is £175 above LHA, the cheapest 3 bed is £275 above LHA and the cheapest 4 bed is £550 above LHA.

     
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    I think Tricia’s point Jo is that supply and demand is the root cause here. If you increase housing benefit more tenants are able to compete for more properties leading to the wealthier to pay more pushing up rents overall and the cycle just continues. Thus the only way to permanently resolve the problem is to increase supply of housing and resolve the supply and demand issue.

     
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    I have a one bedroom flat listed in London at below LHA, but I am having a large number of replies from people who couldn't possibly afford to pay even that rent because it would be too big a percentage of their income.

     
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    I remembe r the days when there was no LHA. Tenants paid rent out of their earnings and it was their responsibility, not the states.

     
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    It puts extra money in the pockets of people at the bottom of the pile and so they can afford to pay more which increases demand & pushes all rents up. Did you not notice the jump when they reversed the freeze in LHA during covid? Rents in my areas jumped with the LHA.

     
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    Tricia- no one is listening to common sense like that, they are morons, and that is so damaging for society as a whole.

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    Affordability checks are very important now, a tenant who cannot afford to pay is of no use to a landlord, leave them to councils and housing associations, their problem not mine

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    I have tenants now paying 30% below market rate because their benefit doesn’t cover it. My costs have gone up and the ticking time bomb of section 24 is now going off as a consequence of interest rate hikes which will lead to even more supply problems due to more LL’s leaving the market.

    It isn’t rocket science to work out that bedroom occupancy is higher in the rental sector than in private homes yet all government policy is to discourage LL’s.

    Finally, over gentrification of accommodation is also part of the problem forced by piling up legislation particularly in the HMO market. My first place to live was a bedsit. I had a sofa bed, a sink and a baby belling to cook on and it was cheep as Chips … I was 17 and happy as Larry in it but that room would be considered far too small and dangerous today. I’m not suggesting standards shouldn’t have improved by the way, but there are consequences to be taken account of and for those creating housing policy and campaign groups consequences appears to be a word that’s been removed from their dictionary’s.

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    Agreed, improving quality = increased cost = increased rent to a point where the low paid cannot afford a home, more tents under that flyover

     
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    Literally that Andrew!

     
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    Andrew
    I think living in your car is the modern equivalent of "tents under flyovers" . Obviously out of sight out of mind. Point is though if illegal immigrants are given 4* accomodation and lots of freebies, most tenants will think, you can do that for me.

  • Matthew Payne

    LHA rates are not fit for purpose anywhere, at least 30% below market rents. One district council has just tried to spread its funding as far as possible by offering landlords a 3 year tenancy at 80% of LHA rates, so that landlords are then also effectively funding the scheme. Bascially not much more than half of what they could get privately now, with that falling quickly in years 2 & 3 as rents rise. On top of which they are insisting on a full asbestos survey on each property. (why??) Donating any white goods that are built in to the tenant at the start so they dont have to be maintained??

    Ive emailed then suggesting a rethink is required before spending any more precious cash advertising the scheme, with a couple of pointers as to why this won't fly, but no reply!

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