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Flagship: third of tenants at risk of unaffordable rents
A housing association has found one-third of its own tenants are at risk of facing unaffordable rents as they struggle to cover daily living costs.
Research commissioned by Flagship Group and carried out by Sheffield Hallam University found 32% of its 20,000 tenants risk not being able to afford their rent if they are hit by further welfare reforms or other unexpected changes to their circumstances.
The report, How Affordable is Affordable Housing?, looked at 2,628 weighted responses from its tenants to a survey. The report recommended the housing association review its lettings policy to ensure it is renting to a “sufficient” proportion of people with higher incomes and retired households that are not on pension credit. The association said it will consider the recommendations and is trialling an “affordability calculator” for new tenants.
It laid out three categories of rent:
- Affordable rent: tenants who think their rent is affordable and have enough money to cover living costs and any unexpected bills or are on full housing benefit paid directly to their landlord (59%)
- Unaffordable rent: tenants who disagree their rent is affordable and state they do not have enough money to cover living costs and any unexpected bills (6%)
- Risk of unaffordable rent: tenants who think their rent is affordable however do not have enough money to cover living costs and any unexpected bills (32%)
The report added: “Any negative changes to the financial circumstances of this group, such as further welfare reforms, could significantly increase the proportion of tenants with unaffordable rent.”
One in five tenants had a rent contribution of more than 35% of their total household income. London mayor Sadiq Khan has linked affordability with one-third of average household incomes.
The report said measures such as these were “arbitrary” and “too insensitive to normal circumstances, especially for low-income groups in social rented accommodation, who are likely to require different levels of incomes after housing costs compared to other groups”.It also found that the group most likely to have unaffordable rent was shared ownership tenants.
Looking forward to future policies, the report said just 3% of its tenants were likely to take up the voluntary Right to Buy, and 5% of respondents were likely to be affected by the Pay to Stay.
The National Housing Federation is calling on the government to allow housing associations to set their own rents, with landlords such as Dolphin Living starting a means-tested rent to tackle unaffordability.
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