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Millions at risk of losing their home due to gaps in housing benefit ‘safety net’

Millions of working renters at risk of finding that housing benefit would not cover the full cost of their rent in they lost a job, new report says.

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Soaring rents and a post-Brexit rise in unemployment could create a ‘toxic cocktail’ for millions of working renters because of large gaps in the housing benefit ‘safety net’, according to a new report by Royal London.

The report ‘Renters At Risk’, by former pensions minister Steve Webb, found millions of workers renters could find that housing benefit would not cover the full cost of their rent in the event of losing their job.



Based on the Government’s 2013/14 Family Resources Survey, the report found 5.5 million working renters would be at risk of losing their home due to gaps in the housing benefit ‘safety net’, up from 2 million in 2003/04. Those at greatest risk were living in London and the South-East, but since 2003/04 the risk has grown fastest in Northern Ireland, Scotland and the North of England.

The report also found that in 2013/14 more than 1 million children were at risk of their family having to move home because of gaps in the benefits system if a parent experienced a hit to their income.

Drawing attention to the controversial ‘bedroom tax’, or spare room subsidy, the report says 3.8 million working renters would be deemed to have one or more spare bedrooms. This substantial group of ‘renters at risk’ would be required to pay up to 25% of their rent.

[contextly_sidebar id=”JI5j0Km96oZtQ54hSnYqSSehJKrdbcA4"]Director of Policy at Royal London Steve Webb said: “Rising unemployment and a surge in the number of private renters could create a toxic cocktail where working renters discover to their cost that there are large gaps in the housing benefit safety net.

“This report shows that the benefits system would not meet the rent of the majority of working renters. Unless they are able to resume paid work quickly, 5.5 million working renters would be at risk of not being able to pay the rent and having to move to cheaper accommodation, if they could find it.

“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.”

Debbie Kennedy, Head of Protection at Royal London, said: “When people take out a mortgage it is normal to think through how the mortgage would be paid if they were to lose their job or go off sick. But this conversation is much less common when people enter into a tenancy agreement.



“This report highlights the large number of people who could find that the support they expected is simply not there if they lost a wage. In an era where private renting is growing so rapidly, we need to ensure that renters are better prepared for such eventualities.”

Green Party leader Natalie Bennett said the report shows why it’s time to invest in “genuinely affordable social homes”.

“Millions of Britons are having to live in great insecurity on a daily basis”, she said. “Our economy is not delivering jobs workers can build a life on, and the market is not delivering the affordable homes households need.”

Bennet added: “The market failed to build enough houses for decade [s[sic]nd it is time to invest in genuinely affordable social homes that remain in public hands.”


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