SINGLE people in receipt of Housing Benefit for privately rented accommodation could face a 200 per cent hike in rent in the New Year.
The move to abolish the existing single-bedroom rate will “severely hurt young tenants” and impact on private landlords as well, a Larne letting agent has warned.
The benefit change will mean that from next month the rate for single people aged 25 to 34 will be assessed using only the shared accommodation rate, rather than the higher one-bedroom rate, as it is at present.
“This will have quite an impact on young single people, especially those between age 25-34 renting from a private landlord and who are in receipt of Housing Benefit,” said Ken Sives, whose agency Sives Properties, specialises in renting across the East Antrim area.
“The current position is that for those tenants over the age of 25, their entitlement is £69.16 per week: the one-bedroom rate. When the proposed changes go through, this entitlement will reduce to the shared-room rate of £46.15 per week. This is a considerable drop,” he added.
Mr Sives explained: “As an example, a tenant renting a relatively inexpensive property (say £350 per month), would see the equivalent monthly sum paid by the Northern Ireland Housing Executive drop from £300 to £200. From the tenant’s perspective, this means that the top-up payment which they are required to pay each month would increase from £50 to £150, or in percentage terms a 200 per cent increase.
“This is going to have a big impact on tenants. Many young people are finding it very difficult to get employment in the current economic climate and these changes will place an even greater burden on social housing. As this only applies to tenants renting from a private landlord, I worry that the NIHE will be inundated with applications for properties – of which they simply do not have the required stock.”
The agent said he feared the rate of homelessness will increase.
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Mr Sives added that some landlords might refuse to rent to those in receipt of Housing Benefit, or let only to those over the age of 34.
“This is not a change which can go unnoticed,” he urged. “Landlords and those renting from a private landlord need to consider how it is going to affect them.”
The Belfast-based Housing Rights Service warned that the majority of Housing Benefit claimants have yet to feel the brunt of the new rules.
Policy manager Nicola McCrudden said that under the current system most single people under 25 who rent from a private landlord are already only entitled to the rate paid for shared accommodation. From January 1, this will be extended to include under-35s.
“It will mean that most single people under 35 making a new Housing Benefit claim or being reassessed from that date will only get this rate, regardless of the size of accommodation actually rented. Some existing claimants will get up to nine months’ protection from this new rule and there are some other exceptions,” she explained.
The Housing Executive is writing to people who may be affected by the change, giving details of the date on which individual claims will be affected. Housing Rights Service, an independent advice agency, is urging people affected to get advice.
“The full effect of the welfare reform changes to Housing Benefit has not yet been felt by the majority of claimants,” said Ms McCrudden. “This is because they are being phased in. From the New Year, the changes will start to apply and many people will find themselves in a difficult situation.”