CRESR Policy Forum 13 June 2012 Monitoring the impacts of ... · Awareness and mobility Relatively little awareness of generic changes to HB (48% 'not very much'; 25% 'nothing at

CRESR Policy Forum 13 June 2012

Monitoring the impacts

of measures for housing benefit

in the private rented sector

- some early survey findings

Professor Ian Cole, CRESR

Research overview

2011- end 2013

Funded by DWP, DCLG, Northern Ireland Office,

Scottish and Welsh Assembly Government

Undertaken by a consortium of CRESR, IFS, Ipsos

MORI and OISP

To provide robust quantitative and qualitative

evidence on claimants’ and landlords’ experiences

To track national and local impacts

To build a cumulative understanding of impact

To model future impact from initial evidence of

change

Research aims

To monitor the impacts of LHA/HB on tenants’

housing decisions and behaviour within the PRS;

To monitor the impacts on supply, rent levels and

landlord behaviour within the PRS;

To model through econometric analysis the

impacts on rents, housing markets, claimants and

landlords in Britain (not NI);

To assess the different spatial impacts of the LHA

across Britain (not NI)

Research challenges

Harnessing qualitative and quantitative methods

Recruiting landlords for survey/interview

Dealing with sensitive issues and vulnerable people

Capturing specific (and variable) local housing

market effects

Attribution of impact of reforms as opposed to

other factors

Needing to ensure evidence as robust as possible

in the light of high political salience and

policy/public interest

Key issues to be addressed (1)

Whether tenants will move to cheaper

accommodation or negotiate rent reductions in

order to stay put

Whether tenants will seek smaller, cheaper

accommodation, share with friends and family or

present as homeless

Whether tenants move elsewhere, and if so where

to, and impact of such moves on household

members, esp. children

Impacts on landlords’ rent-setting decisions and

the supply of properties available to rent to HB

claimants

Key issues to be addressed (2)

Effects on working claimants on low incomes

compared to those who are not in work

Specific impacts on groups such as black and

minority ethnic communities, older people, large

families, people with disabilities

Spatial differences in impact across Britain

Local authority actions taken to help claimants with

any changes in benefit-related income

Allocation of Discretionary Housing Payment funds

What advice channels are being used by claimants

and type of problems being raised

Project Overview and Outputs (1)

Stage 1 report (published tomorrow!)

Findings from stage 1 claimant face-to-face and landlord postal surveys

Interim Report (to be published c December 2012)

based on

claimant and landlord depth stage 1 interviews

housing adviser interviews

initial spatial analysis

adviser depth interviews

initial econometric modelling

Project Overview and Outputs (2)

Final report (published around end of 2013)

Thematic report based on integrating:

claimant follow-up face-to-face survey results

landlord follow-up postal survey results

claimant and landlord follow-up depth interviews

adviser focus groups

further econometric modelling

further spatial analysis

Stage 1 claimant and landlord surveys

19 GB case studies (4 in London, 9 elsewhere in England, 3 in Scotland, 3 in Wales)

Undertaken in Autumn 2011

Early stage impact only

Not nationally representative: purposive sample

Surveys also undertaken in 3 additional case studies in N Ireland in early 2012 . (Separate report to be published in Autumn 2012)

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Claimant Survey

Face to face quota survey 30:70 split for New/Existing

claimants

Sample of 1,910 in total: 399 of which in London

72% were paid their HB; 28% rent paid direct to

landlords

Just over half under 35 years old

29% in full or part time work (37% in London)

48% had lived in present property less than a year

76% satisfaction with accommodation

80% satisfaction with area

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Awareness and mobility

Relatively little awareness of generic changes to HB

(48% 'not very much'; 25% 'nothing at all')

7 out of 10 of claimants who had moved in the past two years said HB had not affected their choice of accommodation

29 per cent gave 'personal or family' reasons and 22% to ‘move into larger accommodation’

33% claimants in London and 19% elsewhere had tried to negotiate the rent beforehand

41% of this group had been successful in reducing rent : 31% in London 48% elsewhere

35% had faced difficulties in finding accommodation.

Of this group, 52% mentioned landlords being 'unwilling to let to HB claimants' (62% of London claimants).

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Shortfalls and affordability issues 67% of all claimants had a 'shortfall' in that HB less than rent

79% of new claimants cf 65% of existing claimants

56% in London cf 71% elsewhere

Most common ways of dealing with shortfall: economising on essential (42%) or non-essential (36%) items or borrowing from family and friends (36%)

27% said they had looked for a job

only 3 % had moved elsewhere: a crucial indicator to track

45% of London claimants (41% elsewhere) said they found it difficult to afford the rent for their current accommodation

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Rent Arrears

10% of claimants were in rent arrears (13% where a shortfall; 8% where not)

'job loss' (9%) and change of income (13%) mentioned as reasons

high rents cited by 11% of London claimants, 2% elsewhere

2% mentioned cut in HB as reason

48% of those in arrears said response of landlord was to ask for debt to be repaid gradually

15% said they had been served with, of threatened with an NTQ

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Potential future actions Hypothetical responses to a future cut in HB

cut back on essential (45%) and non essential (37%) items

look for work (33%) or borrow from family and friends (25%)

Hypothetical actions if could no longer afford accommodation

34% would look at lower rent properties in area, and 22% would look at lower rent properties even if not local

when asked why they would not look at properties elsewhere (448 claimants, 23% of full sample)

39% of this group said because they wanted to remain close to family (26% London); 35% said because they like living in local area (55% London)

35% because they wanted to remain close to good schools (27% London)

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Landlord Survey Postal survey: 1,858 responses received in total

Landlord sample covered same 19 areas, but drawn

independently of the claimant sample

Of more interest to those with current/past LHA

tenants (78% of total sample)

'Smaller landlords' defined as those with 10 properties or fewer within the case study area

'Larger landlords' have more than 10 properties in the case study area

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Characteristics and awareness

Larger landlords account for the vast majority of

lettings: 28% with 10+ properties account for

estimated 87% of total stock

65% of LHA landlords said they preferred to let to

working people; 11% said preferred benefit claimants

35% of landlords outside London (20% in London) said they were not aware of general changes to LHA

Greater awareness of caps by bedroom size and removal of 5 bed rate than 30th percentile and SAR

46% (holding 68% of stock) were aware of overall benefit cap

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Findings: Perceived Impacts (1)

Difficult to disentangle specific impact of measures from other changes in housing market, economy etc

32% of all landlords (46% in London) said measures had affected them 'a lot' or 'a fair amount'

Of specific measures, the most frequently mentioned in terms of impact were bedroom caps (24% of all; 41% London) and 30th percentile (19%; 27% London)

A quarter mentioned SAR changes , even though had not been introduced at the time of survey

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Findings: Perceived Impacts (2)

36% of all (58% of large and 41% of London) landlords said they had tenants in arrears because of the measures;

also reflected in their responses to questions about general market conditions: attribution issue

29% of all landlords (50% large and 37% London) said they had taken at least one of the following - eviction, non-renewal or termination of tenancies - due to LHA measures

18% had not renewed tenancies due to measures : similar level to LHA pilot survey findings

8% of all (12% large) landlords had negotiated lower rent

32% of LHA landlords (17% non LHA) noted increase in prospective tenants asking for a lower rent in previous year,

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Findings: Plans for the Future (1)

Landlords were asked if they had 'considered' or planned to' make certain changes in next 12 months

Eventual actions may differ from intentions - but offer a guide

70% of all LHA landlords said they intended to continue to let to HB tenants in next year

33% of all LHA (40% in London and 42% of large) landlords said they would consider or planned to cease letting to HB tenants in next year

24% of all LHA landlords (26% of large and London) said they might reduce lettings in the case study area

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Findings: Plans for the Future (2)

11% of all landlords (ranging from 4% in Scotland and 20% in three London potential out-flow areas) mentioned LHA measures as a reason (from list) for not continuing to let to HB tenants in next year

32% of all landlords (27% of London) said they would agree to lower rent for tenants if they could not afford it, in exchange for DP

56% (59% of London) said they would not be willing to do this - they own two-thirds of total stock

Landlords in less pressurised areas more prepared to negotiate - availability of an alternative market likely to be key factor

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Conclusions (for now...) Not a straightforward picture - amalgam of local differences

Marked differences from 3 London potential ‘out-flow’ areas

Small minority of claimants said they had reacted to changes by moving - but one in five thought they might over next year

Sizeable minority of all claimants (and over half in London) were reluctant to move because liked where they were living

15% of landlords said they would not let to HB tenants in next year and 15% were not sure: distinct ‘London effect’

In order to attribute with confidence must set these findings against nationwide spatial and econometric analyses.

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CRESR Policy Forum 13 June 2012

Monitoring the impacts

of measures for housing benefit

in the private rented sector

- some early survey findings

Professor Ian Cole, CRESR