he squeeze is being put on social tenants. The reality of austerity and the looming consequences of welfare reform are putting pressure on the living standards of most social tenants, who are now likely to remain "poor in perpetuity" once welfare reform comes into effect.
These households, already surviving on low incomes before the financial crisis struck in 2008, have seen their incomes stagnate and now face a future living on the margins in one of the world's wealthiest economies.
The average tenant's income has been eroded by more than a tenth over the last four years – equivalent to £17 per week – as wages and benefits have been overtaken by the rapidly rising costs of living. High food and fuel inflation cut especially deep into tenants' pockets.
Using lettings statistics, our research reveals that social housing is also facing worsening levels of economic inactivity and rising rates of benefit reliance due to growing unemployment and cutbacks in grants for further and higher education. The net economic activity rate (excluding retired tenants) has fallen from 41% to 37% since the international financial crisis began. Now 53% of tenants live on incomes wholly derived from benefits, with 16% relying at least in part on state support, in contrast to 50% and 13% respectively four years ago.
As well as a growing income gap between tenants and the national average, there is a yawning wealth gap between homeowners and tenants – of at least £100.
Few tenants have much in the way of assets upon which they can depend in times of crisis and almost half of the minority with savings have less than £1,000. With the social fund now abandoned and the funding pot localised, tenants are left with few options at a time of need except to seek out loan sharks or take up high interest loans from doorstep lenders or from payday loan companies charging massive rates of interest, putting further pressure on incomes already stretched to breaking point.
More than 400,000 social tenants, at least one in 10, will be further squeezed with the introduction of the bedroom tax. Focus on reducing expenditure on disability and incapacity benefits – another one in 10 tenants are claimants – and the introduction of universal credit are likely to drive tenants into increasingly desperate straits. We have found that hundreds of Trident tenants are already reliant on food banks and charitable furniture provision set-up by its charitable arm to provide the basics of life. And many cannot afford heating in winter.
It is clear, then, that we are not "all in it together". Social tenants, already among society's poorest have already borne the brunt of austerity.
Welfare changes to come will make the lot of social housing tenants worse. Many will see further erosions of their incomes with growing debt. Their ability to sustain tenancies must also be a concern with likely further rises in homelessness in the offing. The next few years are going to be hard for tenants, and social landlords will need increasingly to provide services that help the sustainability of tenancies in place of a retrenching state.
The Guardian website, 10 August 2012