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The number of Londoners renting privately at risk of having to move home if they become jobless or lose their income due to sickness has soared to nearly 600,000, a new study warned today.
The analysis by leading insurer Royal London found the number of households in the capital in such a precarious financial position had more than doubled in just over a decade.
These “renters at risk” include many families whose children could have to change school if they were forced to move home.
The study, by former pensions minister Steve Webb who is now director of policy at Royal London, highlighted three main factors behind this “toxic cocktail” threatening working Londoners.
The number of renters has risen sharply as buying a home has become so expensive, employment has hit a record high and there have been cuts to housing benefit.
Latest figures show the number of working adults in London who could be affected by these factors, if they lost their income, rose to 867,000 in 2014/15, from 338,000 in 2003/04.
It would have reached 963,000 in 2016/17 if as expected the number has continued to rise at least in line with the trend over the past decade.
Some 790,000 of them are calculated to be renting in the private sector, with the remaining people in housing association or council homes.
Around three quarters of the 790,000 - or 592,000 - would run out of money for rent and other bills, according to the analysis, after three to six months.
The age breakdown of these “renters at risk” includes 44,000 under 25, 314,000 25 to 34-year-olds, 142,000 aged 35-44, 84,000 45 to 54-year-olds, and 8,000 aged 55 or over.
The study warns private renters could be affected in at least four ways:
* Couples who need both their salaries to pay the rent, and lost one of them, would in many cases not quality for housing benefit given its sharp earnings ‘taper’.
* Single people under 35 would usually only be entitled to housing benefit at shared accommodation rate.
* People with “spare bedrooms”, according to welfare rules, finding housing benefit not covering their actual rent.
* Housing benefit rates only meeting rent levels in the cheaper parts of an area.
Mr Webb said: “More needs to be done to help families living in rented accommodation to think through the implications of the very limited state safety net on which they might be relying.
“Unless they are able to resume paid work quickly, approaching 600,000 working people renting in the private sector in London could be at risk of not being able to pay the rent and having to move to cheaper accommodation, if they could find it.”
London and housing minister Gavin Barwell, MP for Croydon Central, has recognised more focus needs to be put on helping renters.
A Government spokesman said: “We’re creating a bigger, better private rented sector with up to £10 billion in Government-backed guarantees to attract more institutional investment in quality homes for rent.” Unemployment and sickness benefits ensured “a strong safety net for the most vulnerable”, he added.
London Mayor Sadiq Khan has also outlined plans for a “London Living Rent”, a new type of tenancy for newly-built affordable homes aimed at low and middle-income households, typically earning between £35,000 and £45,000 and currently renting privately, to help them save for a deposit by offering them a below-market rent.
The number of Londoners renting privately at risk of having to move home if they become jobless or lose their income due to sickness has soared to nearly 600,000, a new study warned today.
The analysis by leading insurer Royal London found the number of households in the capital in such a precarious financial position had more than doubled in just over a decade.
These “renters at risk” include many families whose children could have to change school if they were forced to move home.
The study, by former pensions minister Steve Webb who is now director of policy at Royal London, highlighted three main factors behind this “toxic cocktail” threatening working Londoners.
The number of renters has risen sharply as buying a home has become so expensive, employment has hit a record high and there have been cuts to housing benefit.
Latest figures show the number of working adults in London who could be affected by these factors, if they lost their income, rose to 867,000 in 2014/15, from 338,000 in 2003/04.
It would have reached 963,000 in 2016/17 if as expected the number has continued to rise at least in line with the trend over the past decade.
Some 790,000 of them are calculated to be renting in the private sector, with the remaining people in housing association or council homes.
Around three quarters of the 790,000 - or 592,000 - would run out of money for rent and other bills, according to the analysis, after three to six months.
The age breakdown of these “renters at risk” includes 44,000 under 25, 314,000 25 to 34-year-olds, 142,000 aged 35-44, 84,000 45 to 54-year-olds, and 8,000 aged 55 or over.
The study warns private renters could be affected in at least four ways:
* Couples who need both their salaries to pay the rent, and lost one of them, would in many cases not quality for housing benefit given its sharp earnings ‘taper’.
* Single people under 35 would usually only be entitled to housing benefit at shared accommodation rate.
* People with “spare bedrooms”, according to welfare rules, finding housing benefit not covering their actual rent.
* Housing benefit rates only meeting rent levels in the cheaper parts of an area.
Mr Webb said: “More needs to be done to help families living in rented accommodation to think through the implications of the very limited state safety net on which they might be relying.
“Unless they are able to resume paid work quickly, approaching 600,000 working people renting in the private sector in London could be at risk of not being able to pay the rent and having to move to cheaper accommodation, if they could find it.”
London and housing minister Gavin Barwell, MP for Croydon Central, has recognised more focus needs to be put on helping renters.
A Government spokesman said: “We’re creating a bigger, better private rented sector with up to £10 billion in Government-backed guarantees to attract more institutional investment in quality homes for rent.” Unemployment and sickness benefits ensured “a strong safety net for the most vulnerable”, he added.
London Mayor Sadiq Khan has also outlined plans for a “London Living Rent”, a new type of tenancy for newly-built affordable homes aimed at low and middle-income households, typically earning between £35,000 and £45,000 and currently renting privately, to help them save for a deposit by offering them a below-market rent.
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