Young Social Tenants Hit Hardest by Budget
George Osborne’s Budget is set to make life even harder for young social tenants. On top of capped and denuded benefits, and the abolition of the Education Maintenance Allowance since 2010, Chancellor George Osborne has now added a range of measures that embed intergenerational unfairness where the young take the biggest hit to reduce a public debt they did not create.
Budget measures that disproportionately affect those under 25 years of age include shrunken Tax Credits, raised University tuition fees, abolition of higher education grants, and stripping away of youth services. Together with the removal of housing benefit entitlement for those aged below 21 years, the Budget piles pressure on the young while the baby boomers sit on their equity and pensions.
Recent research by the Human City Institute shows how the exclusion of young people from the ‘Living Wage’ regime, together with other measures announced in the Budget, disadvantage young social tenants.
Creating a national Living Wage – although what was announced by George Osborne was really a raised Minimum Wage – could have been a Budget compensator for the young but it only applies to the over 25s.
This is unfortunate since young social tenants prioritize a Living Wage, together with greater job security, better welfare benefits and access to affordable credit as key ways to improve their lives and life chances.
In our research we also found an escalating cost of living crisis for young social tenants. Household essentials, like food and fuel, have seen spiralling costs since 2008, sometimes at two and three times the rate of general inflation, while wages and benefits for young social tenants have been stagnant or falling in real terms.
Half of young social tenants are NEETs – not in employment, education or training. Long-term unemployment is a growing problem for many with one in two of unemployed tenants under 25 years having been so for more than two years.
Almost one fifth of young social tenants have not had a job of any description since leaving full-time education. Around one in eight working tenants under 25 years are on zero hours contracts. The result is that most young social tenants live on little, with eight in ten existing on net household incomes of under £10,400 annually.
Unsurprisingly, many are increasingly reliant upon their housing association social landlords to provide opportunities for work, training and community support. While housing association investment in community support is £1.5bn annually, including in employment creation and training provision of young people, this work is under threat since the government now requires associations to reduce their rents by 1% annually for the next four years.
With social housing in decline, young people have very little alternative except to move into an overly expensive, insecure and impermanent private rented sector. The government’s requirement for social tenant households earning more than £30,000 a year - £40,000 in London – to pay market rents (the so-called ‘pay to stay’ policy) will further attack the living standards of some young people living in social housing or force then into precarious private renting.
Our research reveals that more than half young social tenants want to remain with their social landlords. Just 4% desire to move into the private rented sector. The remainder have aspirations to become home owners but few are under the delusion that this will be possible given their current economic circumstances.
The answer, as social housing campaign group SHOUT have argued, is for more social housing to be built. This will not only provide housing at affordable rents for young people but also provide a Keynesian stimulus of £3 for every £1 invested to the wider economy through the construction supply chain and in employment creation.
This is a far more rational housing policy that places the futures of young people centre stage.