Low-income tenants battle soaring rents

Sale signs

Low-income tenants are currently spending an average of 28% of their wages on rent, up coming from 21% inside mid-1990s, completely new research indicates.

They have been hit by substantial cuts to housing benefit, with government support required to fall “further in addition to further behind” the cost of housing, says the Institute for Fiscal Studies.

Over the same period of time, the proportion of people renting homes privately has increased coming from 8% to 19%.

Average private rents have gone up 33%.

“Renters are paying considerably more for their homes than 20 years ago,” says the IFS analysis, funded by the Joseph Rowntree Foundation.

“In real terms, the median private rent paid in London was 53% higher inside mid-2010s than inside mid-1990s, while inside rest of the country, which was 29% higher. Those rises mainly occurred inside late 1990s in addition to early 2000s (in London) or the early in addition to mid-2000s (elsewhere).

“Meanwhile, social housing rents have been consistently growing in real terms since the mid-1990s.”

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The IFS said alterations to housing benefit policy had so far cut entitlements For two main-thirds of low-income private renters in addition to one-sixth of low-income renters in social housing.

Future reforms were required to improve the number of people facing a shortfall between the amount of housing benefit they received in addition to the rent they had to pay.

“Wider problems inside housing market are pushing up housing costs in addition to increasing the size of the rented sector,” said Agnes Norris Keiller, a research economist at IFS in addition to an author of the report.

“While these remain unaddressed, there is usually likely to be an ever tougher choice: continue decoupling support for housing costs for those on low incomes coming from the rising cost of housing, or change policy in addition to accept further rises inside housing benefit bill.

“The current approach effectively places most of the risk of further rises in costs on to low-income tenants, in addition to little on the housing benefit bill.

“While containing the cost to taxpayers, which leaves housing benefit vulnerable to becoming increasingly irrelevant with respect to its purpose – maintaining the affordability of adequate housing for those on low incomes.”

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