In March 2022, 83% of adults in the United Kingdom reported an increase in their cost of living. Household post-tax incomes adjusted for inflation are expected to begin dropping in Q2 2022 and not recover until Q3 2024, according to the Office for Budget Responsibility.
On average, low-income households spend a larger proportion of their income on electricity and food than the average household, thus price hikes will have a greater impact on them.
According to the Resolution Foundation, an additional 1.3 million individuals, including 500,000 children, will slip into absolute poverty by 2023 thanks to the escalating cost of living crisis.
To cope with the rising costs, low-income tenants in most regions of England will be forced to skip the equivalent of one day's worth of food and heating per week, or risk falling behind on their rent and suffering eviction, or falling behind on important bills.
With rents rising rapidly across the country, new UK Government data shows that housing benefit no longer covers the cost of renting a modest property in most parts of England, leaving low-income families with a £372 deficit to make up in other ways.
Those most affected are also the most reliant on housing associations
The impact on social housing renters
In the midst of the current cost-of-living crisis, life for renters in financial distress is likely to become even more difficult. Growing living costs are putting more and more individuals in danger of falling behind on their rent.
Low and unpredictable income - as well as substantial and unexpected costs - are two of the top causes of social housing renters falling behind on their payments, according to the newest research from cross-party think tank Demos, in a report entitled ‘The Bottom Line.’
The rising cost of living will put even more strain on these main drivers, making things worse for those who are already behind on their payments.
How HA’s and LA’s can help
Most would agree that people require three essential elements to thrive in life: health, education, and security. If one of these ingredients is missing, the others become unstable as well.
Many people take housing for granted when it comes to security, but it is the ultimate foundation that people require before they can achieve their other goals.
Whether it's homeownership, private-sector renting, or social housing, each style of housing plays an important part in creating a market that fits the requirements of diverse people.
However, as the cost-of-living crisis worsens, the challenges facing the poorest people are becoming more obvious than ever. It implies that truly affordable housing is more crucial than ever before to our communities and cultures.
Many people on universal credit are finding it increasingly difficult to stretch their money, and the reality of making 'food or fuel' decisions is all too true.
The need for a concerted effort
The housing industry must do all that is possible to ensure that people have access to a variety of dwellings and tenures, allowing them to rent or own. Waiting lists are expanding, and given the current state of the social housing market, they are unlikely to diminish without some concerted industry and government engagement.
Those most affected by the cost-of-living issue are also the most reliant on housing associations, which play a critical role in fostering financial and social well-being.
Affordable housing helps to alleviate social inequities as well as economic inequalities. Housing associations offer a unique opportunity to provide additional support to our communities' most vulnerable residents, whether via education, job training, or providing shelter and safety.
It's not simply that a slower rate of affordable housing construction results in fewer dwellings; it also widens the social divide between those who have and those who don't.
Housing associations are under siege due to a slew of issues.
When you combine a reduced demand for development with policies like Right to Buy, which often means fewer social leased homes in a given location, it's evident that the industry needs to work more.
Part of this will entail being more assertive in pressuring the government for assistance and exposing the extent to which the cost-of-living problem will affect the lowest members of society.