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028 9024 5640: Housing & Debt Helpline for Northern Ireland

Poverty and housing - Paying the rent

Joseph Rowntree Foundation (JRF) Findings  published recently 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 a series of articles HRS Policy Manager, Nicola McCrudden, looks behind headline figures and provides some thoughts on the importance of housing in tackling poverty. This article focuses on private rented housing.

Paying the rent (part 2)

Enquiries to Housing Rights Service relating to affordability problems in the private rented sector, has more than doubled in the past two years. Last year our advisers responded to 4,658 affordability issues which was one third of all issues from private tenants.  So can the sector provide an affordable alternative to social housing?

Research commissioned by the DSD into the impact of welfare reform through Local Housing Allowance (LHA) changes in the private rented sector was published in March.  The report by Sheffield Hallam University concluded that LHA had had an impact on attitudes and behaviour in the sector in a number of ways:

  • An increased number of landlords said they wouldn’t let to single under 35s in the future.
  • Landlords noticed an increase in negotiations over rents by existing and prospective tenants.
  • More landlords felt that rent arrears had increased in the past year due to LHA
  • Tenants reported increasing pressure on household budgets making it more difficult to fund the shortfall in rent (60% of the tenants’ LHA covered less than full rent).

One of the most startling facts in the report was that 9/10 tenants, who were struggling to pay their rent, were running out of money at the end of the week.

As we know, affordable housing is central to alleviating the impact of poverty. Low rented housing significantly reduces poverty and the negative affects of low income. Traditionally social housing was provided for those in most in need or struggling with their housing costs. However with supply shortages, more households have to rely on private rentals. With cuts in housing benefit support there are definite signs that, for certain groups of tenants, it’s becoming increasingly more difficult to meet housing costs.

Moving into private rented accommodation can also be expensive. Our mystery shopping survey of 40 lettings agents across Northern Ireland found that upfront fees of as much as £100 were demanded by some agents to cover routine services such as credit checks and general administration costs.

This was on top of a deposit (normally one month’s rent) and a month’s rent in advance. The largest financial outlay we found was a Belfast agent charging a non-returnable fee of £40 for both a tenant and guarantor credit reference check, on top of a deposit and rent in advance (both £675). This required an initial upfront payment of £1,430 for the tenant to move in. How is it in any way acceptable to expect families in poverty to find these sums of money?

So, accessing and sustaining private rented accommodation can be problematic; particularly if a person’s income is restricted. Currently there is £250m of housing benefit being paid into the sector locally which will reduce over time through welfare reform cuts. There is a fear that as house prices pick up some landlords may decide to exit the market completely. The sector is sensitive to market change; yet Government is placing increased emphasis on using this form of tenure to meet the needs of low income households, including those most in need who are homeless.

What Northern Ireland needs is a stable private rented sector, providing good housing at reasonable amount of rental. This will require creative thinking, investment and government intervention. The introduction of a development strategy for the sector which includes systems for regulation which have positive outcomes for both landlords and tenants can be achieved. If we are serious about meeting housing need, we need to sign up to the vision of a bigger and better private rented sector which works for both tenants and landlords.

Tagged In

Private Tenancies, Policy, Affordability

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This article was written on 22 May 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.