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When everyone has a home

028 9024 5640: Housing & Debt Helpline for Northern Ireland

Poverty and housing

Joseph Rowntree Foundation (JRF) Findings[1] published last month revealed that household incomes, poverty rates and the labour market have all worsened in Northern Ireland (NI) in the last five years. In each case, this deterioration has been greater than in Britain.  NI also has a higher poverty rate than the rest of Ireland. Before housing costs, 21% of people in NI were in poverty in 2011 compared with 15% in the Republic of Ireland. In this series of articles HRS Policy Manager, Nicola McCrudden, looks behind headline figures and provides some thoughts on the importance of housing in tackling poverty. She starts with social housing.

Paying the rent (part 1)

Headline indicators show some growth in the Northern Ireland economy, but for most of our clients there is little evidence to suggest that the situation is improving. For many, poverty continues to be a daily struggle.

Housing plays a central role in alleviating the impact of poverty in society. Low rented housing significantly reduces poverty and the negative affects of low income. Traditionally, public and social rented housing has mitigated against the effect of rents on poverty levels. However, new challenges lie ahead for social housing landlords. Those with commercial aims, for example, face the dilemma of balancing the requirement of rent maximisation with traditional roles of addressing poverty and homelessness. Also, inevitably welfare reform will bring about change – in particular, the bedroom tax.

Rent levels in social housing have been largely met through housing benefit. This means that landlords have not had to interact as much with tenants in receipt of full housing benefit around arrears levels. Our experience shows that rent arrears amongst low waged tenants tend to be higher. With JRF highlighting a rise in both workless poverty and in-work poverty among older working age adults, future considerations will need to include what can tenants, and prospective tenants, afford?

Social housing rent levels in NI vary greatly. Between 2001-2011 Housing Executive rents rose by 35% (set by DSD). In comparison, housing association rents (set by their Boards) rose by 85%.[2] Understandably, a rent setting policy for NI is high on the social housing reform agenda. According to a recent DSD report the lack of a comprehensive rent policy has led to a situation where NI has the lowest public rents and amongst the highest Housing Association rents in the UK. It says “It is questionable whether either of these two positions is sustainable in the longer term without, on the one hand, undermining the quality of public housing for tenants in the future or on the other restricting access to social housing for low income families on affordability grounds.”

So we are all in agreement that rents must be “affordable” – but what does that mean? The affordable v social debate[3] took centre stage in the House of Commons recently and also emerged as an issue with the prospectus of new borrowing for council housing. In my view a move towards the English “affordable” rents system of charging up to 80% of the local market rent would inevitably have a negative impact on poverty levels in NI – particularly amongst low waged households.

As an anti-poverty landlord, JRF argues that poverty work should be fully integrated into the business strategy and operational plans of housing providers. Looking ahead, the social rented housing sector in NI will have to meet head on the challenges of helping to alleviate poverty while remaining viable businesses.

They must be able to respond in a positive way to change by developing practical and innovative solutions to assist low income households such as promoting financial inclusion and capability, helping with moving in costs, assisting tenants to get appropriate support and advice; and improving energy efficiency.

Low rented housing is hugely important in helping to reduce poverty, as it provides families with much needed disposable income after the rent is paid.  The social housing reform programme will soon be considering NI rent levels. Part of this review must consider the close links between housing and poverty. Subsequent proposals for a rent setting policy must therefore be poverty tested.

 

Tagged In

Social Tenancies, Policy, Affordability

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This article was written on 29 April 2014. It should not be relied on as a statement of the current law or policy position. For help with housing issues please contact our helpline on 028 9024 5640 or use our online chat service at www.housingadviceNI.org.