Housing benefit no longer enough for struggling families to afford any Ipswich rental properties
PUBLISHED: 06:00 28 November 2019 | UPDATED: 08:05 28 November 2019
Families are having to choose between putting food on the table or a roof over their heads because housing benefits no longer meets the cost of private rents.
The Bureau of Investigative Journalism could not find a single two bed property in Ipswich that was affordable on Local Housing Allowance (LHA) during a recent snapshot search.
The TBIJ research found that only one in 20 of the two-bed properties advertised for rent nationally were affordable on LHA. Across most Suffolk and Essex just a fraction of the properties advertised for rent would be affordable on LHA.
It means many families are having to make tough decisions to cope.
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Young mum Taylen Wildflower, who lives in Ipswich, said she received £500 but had to find a further £150 "just to have a roof over my head". "It's actually crazy," she said. "Sometimes it's the difference between food in my mouth and a roof over our heads - although I always make sure the little one has food."
Luana Beer, 44, who also lives in Ipswich, said she had been living with her sister since June, having been told by the council she would unlikely be offered social housing. Despite working three jobs and receiving Universal Credit, Ms Beer said she had been unable to find any private rentals for her and her 19-year-old autistic son. "I've had so many refusals and knock-backs, I'm at the end of my tether," she said. "I've been told landlords' insurance doesn't let anyone on benefits get through the application process, so I feel I'm on a hiding to nothing.
"It depresses me totally, if I'm honest. I don't know what else to do."
LHA is supposed to cover the cheapest 30% of properties in that area. But it was frozen in 2016 as a cost-cutting measure, intended to save £1.3 billion a year, rising to about £1.7 billion by 2020-21.
Although the number of affordable rent homes created in Suffolk has risen over recent years - reaching 500 for the first time in 2017/18 - councils still rely on private landlords to provide much of the housing for benefit recipients.
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And with rents continuing to rise more people are priced out.
According to a House of Commons report from July, there is evidence of a "growing gap between actual rents and the amount of rent that is covered by LHA, which is making rental properties unaffordable for benefit claimants".
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"There is concern that this is having an adverse impact on levels of homelessness and the ability of local authorities to use private rented accommodation in order to discharge their duties to homeless households," the report added.
Neil MacDonald, who is responsible for housing at Ipswich Borough Council said the way LHA was calculated had "failed completely" - and called for it to be updated to reflect the true cost of renting in the town.
"In Ipswich the average wage is lower than the national average," he said, "There are large numbers of people employed in traditionally poor paying sectors: warehousing, fruit and veg picking, catering, hospitality, care workers, nursery nurses.
"These are the people who are suffering - working people who claim in-work benefits."
Mr MacDonald said 3,000 households were on the housing waiting list, including 1,250 priority need cases. He said 660 households had been placed in council housing and housing association properties - but that alone was not enough to solve the problem.
He said the government had steered councils to use the private sector - while at the same time setting an LHA that was insufficient.
"IBC has been active in trying to use the private sector for a number of years, and have placed about 90 households in private rent," he said.
"The main issue is that private rents are more than the LHA. However, IBC offer a service to landlords that guarantees payment for three years, manages the tenants and there is now an incentive payment up front."
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But not all landlords are prepared to accept benefits recipients.
A survey of private landlords and the impact of welfare reforms, published in July by Edge Hill University, found that most landlords (57%) reported that they would not be willing to rent to benefit claiming tenants where they know there is a short-fall in LHA.
Over half of landlords (54%) with Universal Credit tenants had experienced rent arrears in the past 12 months.
Universal credit combines a range of benefits into one payment; meaning many recipients are having to use money that had been allocated to help with living costs just to top-up their rent.
What are councils doing about it?
Councils say they are working to address the shortfall between housing benefits and private rents.
West Suffolk Council's Sara Mildmay-White said she recognised the local housing market was expensive and had encouraged housing associations to build more social rented homes.
She said the council worked with tenants and landlords to prevent homelessness by ensuring people are claiming the benefits they are entitled to as well as directing them to support agencies.
"Last year we helped prevent 393 households from becoming homeless and in most cases we were able to help the residents stay where they were," she added.
West Suffolk Council also offers landlords a "guaranteed rent scheme" to provide assurances when they lease to tenants on benefits.
Jan Osborne, at Babergh District Council, said officers carried out "affordability assessments" to consider whether a property is a viable option for a claimant. In some cases, the council will also negotiate with landlords to reduce rents.
"A good relationship with local landlords will make more accommodation available and help families in need," Ms Osborne added.
Mid Suffolk District Council recently recruited a "lettings negotiator" to work with private landlords to increase the number of affordable properties. "Our overall aim is to prevent families becoming homeless, so getting landlords on board is essential," said the council's Julie Flatman.
Tendring District Council's Paul Honeywood said the LHA was rarely enough to cover private rents and most people needed to top up from their other income. He said Universal Credit, which amalgamates all benefits into a single payment, was intended to encourage people to budget their expenses. "With careful budgeting most will be able to afford their top up," he said.
TDC also offers deposit guarantees and rent in advance to help those facing homelessness. "There is insufficient supply of social housing to house everyone in receipt of housing related benefits so the private rented sector is the only option for them," he said. "The council works with local landlords where it can to ensure the housing on offer is as affordable as possible and of a decent standard but over recent years the supply has reduced and rents have risen."
Colchester Borough Council said it offered help via the government's Discretionary Housing Payment. Its Homestep scheme can also cover deposits and advance rent if the property is deemed to be within the client's price range.
The government said it had provided more than £1billion in discretionary housing payments since 2011. It has also increased more than 360 LHA rates.
"Specific decisions on the uprating of LHA from April 2020 will be made as part of wider government fiscal planning in due course," a spokesman added.