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Affordable Housing Commission: Call for evidence response

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Our response to the Affordable Housing Commission’s call for evidence

StepChange Debt Charity data suggests that the increasing lack of affordable housing across the UK could significantly increase the chances of households falling into debt.

We’ve responded to the Affordable Housing Commission’s Call for Evidence as the private rented sector is increasingly becoming the only housing sector where our clients who are in problem debt can find a home.

In particular, it is associated with increasing numbers of our clients with an additional vulnerability. Many of these clients prioritised paying their rent by taking out credit, many using high cost credit, adding to their financial difficulties.

Because of their poor credit rating many are paying a “debt premium” in the form of higher deposits and/or rent and cannot accrue sufficient savings to be able to access a mortgage to buy their own home.

For many of our clients a lack of affordable housing results in significant negative consequences. These include the extreme of being made homeless, to not being able to afford deposits or letting agent fees, feeling forced to move from their current home or simply putting up with problems because of the worry of eviction. All these problems affected a higher proportion of clients who rented, particularly in the private sector. A lack of affordable housing also had a negative impact on our clients’ health, relationships and ability to work or find work.

We recommended there needs to be a shift from policies to support people to buy their own homes to initiatives to provide affordable housing for rent. Although the long-term solution of building more social housing at social rents is finally being accepted as a long-term policy solution to improve housing affordability, this policy intervention will take many years to yield results and cannot address the housing problems that our clients are currently experiencing.

Some shorter-term solutions include:

  • A cross-government review of the use of the private rented sector for housing vulnerable people
  • Including protections from eviction for rent arrears in the Government’s new Breathing Space and statutory debt repayment plan schemes
  • Evaluating the impact of introducing open-ended private tenancies and an end to “no-fault” grounds for possession in Scotland, with a view to roll out in other nations
  • The use of good rent payment records to improve credit reports which may help to reduce the ‘debt’ premium on both credit and housing costs. However, policy makers must consider safeguards to ensure extending data sharing does not harm people with current or past experience of payment difficulties.
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“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2019