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Falling behind: The growing gap between Local Housing Allowance and market rents in Northern Ireland

Professor Joe Frey. Photo by Kate McCauley

On Monday 14 October 2019 Housing Rights and Chartered Institute of Housing hosted a conference on ‘Delivering genuinely affordable homes in Northern Ireland‘. In this blog, Professor Joe Frey highlights a major piece of research, which was launched at the event and shares his reflections on the wider discussions that took place. 

The Skainos Centre in the heart of East Belfast was an appropriate location for the recent conference, Delivering genuinely affordable homes in Northern Ireland, organised by Housing Rights and the Chartered Institute of Housing. Located in an area shaped by decades of large-scale regeneration and surrounded by affordable housing, this environmentally sensitive edifice, encapsulates many of CaCHE’s values. It also provided the setting for the launch of a major piece of research undertaken by Housing Rights entitled, Falling Behind: Exploring the Gap between Local Housing Allowance and the availability of affordable private rented accommodation in Northern Ireland, which was supported by the UK Collaborative Centre for Housing Evidence (CaCHE).

CaCHE decided to support this work for a number of reasons. Firstly, it contributes directly to achieving one of CaCHE’s overarching aims of addressing housing-related poverty. Secondly, it chimed with the key co-produced themes that emerged from last year’s prioritisation workshops which have guided our research programme. Thirdly, it made ample use of a large dataset going back 10 years (2008-18) provided by the Northern Ireland Housing Executive and enriched the analysis of this dataset with qualitative data based on Housing Rights’ advice records. Finally, and in some ways most importantly it has the potential to have a powerful policy impact in Northern Ireland, where there is currently a clear policy disconnect between the protection from the “bedroom tax” afforded to social tenants through the “Mitigation Package”, and the increasingly limited support to low-income households in the private rented sector via Local Housing Allowance.

The research was undertaken by Dr Martina McAuley, Housing Rights’ Research and Evaluation Officer, who also presented the key findings from the research to a conference audience of around 100 from a wide range of public, private and voluntary sector stakeholder organisations. In a coherent, well-illustrated presentation, Martina gave an overview of the stark reality of low-income households struggling to find or live in affordable privately rented homes in Northern Ireland today. Against a background of stagnating real incomes, significant reductions in benefits and rising market rents, the curtailment of Local Housing Allowance, and in particular the reduction of the LHA rate to the 30th percentile in 2011 and the widespread freezing of LHA rates at their 2015 level, has resulted in a growing gap between LHA and contractual rents.

Key findings emerging from the research included the following: in 2018, the proportion of available rental properties available across all of the eight Broad Market Rental Areas (BRMA) averaged 12 per cent – far below the 30th percentile; indeed 13 of the 40 BRMA / property type combinations had fewer than 1 in 10 advertised properties available at the LHA rate. Younger single people in Belfast faced particular challenges, with only 3 per cent of properties available at the LHA (shared-room) rate. In monetary terms, the potential average shortfall between LHA payable and actual rental levels by BRMA ranges from £45 per month to £134 per month.

Qualitative analysis of Housing Rights’ advice database reinforced this picture by revealing that in recent years a growing number of private tenants have been seeking advice and support because of inability to pay the difference between the LHA they are receiving and the rent demanded by landlords. Housing Rights’ caseload grew from around 100 to more than 800 annually over a 5-year period, with specific problems arising due to rent increases, work-related issues, arrears and difficulty finding other accommodation – often compounded by age-related issues (lack of affordable shared accommodation for younger people or older people having to leave the family home).

There were, of course, a number of other interesting presentations at the conference, that highlighted the challenges involved in the delivery of affordable homes. David Polley, the Department for Communities’ Director of Housing Supply Policy, provided a useful update on the current policy context and an insight into the challenges of policy development without a functioning Northern Ireland Assembly. Paul Hackett from the Affordable Housing Commission outlined their proposed innovative approach to defining affordability that focuses on four groups of people: struggling renters of working age, low income older households, frustrated first-time buyers and struggling homeowners, and uses more nuanced indicators of affordability based on equivalised residual household income. Justin Cartwright, the newly appointed Director of the Chartered Institute of Housing in Northern Ireland, updated the conference on ongoing work in relation to Rethinking Social Housing and provided some interesting insights into how affordability could be taken into account as part of the allocations procedure. For example, Hull City pre-tenancy affordability assessments highlight cases where applicants most at risk are signposted for additional support. The morning was rounded off by Mark Graham, Chief Executive of Co-Ownership Housing Association, who provided clear evidence of the important role that Co-Ownership plays in supporting first-time buyers into a home of their choice, but also highlighted the significant differences between the financial assessments of potential first-time buyers undertaken by the banks and building societies and those undertaken by Co-Ownership.

In the afternoon there were again a range of interesting speakers, but two, in particular, stood out for me. Firstly, Steve Stride, the Chief Executive of Poplar Harca housing association gave a thought-provoking insight into his organisation’s affordable rent models, which in combination with £2.5 billion of leveraged investment had enabled the large-scale regeneration of one of the most deprived areas of East London. Based on his experience he highlighted the potentially very positive impact that the LSVT of Housing Executive properties could have in the context of Northern Ireland. Secondly, Sean Cullen, from Belfast Housing Lab, a recently formed organisation that specialises in designing, developing and trialling new strategies for improving housing and accessibility in Belfast using small scale experimentation and working in close collaboration with local stakeholders. A well-illustrated presentation highlighted the potential of learning from innovative developments in other countries such as Finland, where, for example, a ‘good neighbour’ pilot in Helsinki enables tenants on low incomes to effectively pay a substantial part of their rent by being a ‘good neighbour’ for 20 hours a week.

All in all, a really good thought-provoking conference that highlighted the huge potential of learning from other parts of the UK and further afield – although one that once again exacerbated the feelings of frustration at the constraints currently imposed by the political stalemate in Northern Ireland.

Professor Joe Frey is a Knowledge Exchange Broker at the UK Collaborative Centre for Housing Evidence. 

Views expressed by authors may not represent the views of CaCHE.

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Date: October 24, 2019 2:48 pm

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