The Shared Accommodation Rate is letting young people down
If you’re young, single and need help to pay your rent, the government expects you to share a house with people you’re not related to. The Shared Accommodation Rate (SAR) is the lowest rung of housing support, paid to single people, without children, aged under 35 years old.
Our National Red Index shows the hardship that the SAR is causing. When we help people with debt issues to budget their spending, we can see that those who receive the SAR are much more likely to have a shortfall between their rent and the level of support they receive. They’re more likely to be in a negative budget as a result — where their income doesn’t cover their essential costs.
Following our report showing how housing cost support was failing to keep pace with rising rents, the government has unfrozen this for the coming year. From April, anyone in the private rented sector who gets help to pay their housing costs will see an increase to their monthly payments. Whilst this may only be a short term solution, we hope that many people will find it easier to make ends meet once these payments start coming through.
But even with this increase, there are problems with shared housing that mean the SAR needs a rethink. Shared accommodation isn’t always available and even if it is, it isn’t always going to be right for everyone. For these reasons, it’s unfair to base housing cost support on a type of housing that can lead to people living in insecure or inappropriate accommodation.
The SAR isn’t meeting needs
The SAR is the lowest level of Local Housing Allowance (LHA). LHA is the amount of support people in the private rented sector get to pay their housing costs. LHA tries to balance the level of support with the level of need. This means, for example, that a family with 2 young children will get an amount of money based on the price of a 2 bedroom house in their local area.
The system isn’t perfect, but it at least tries to provide a level of support appropriate to people’s circumstances.
When it comes to the SAR, however, support is calculated based on the price of a room in a house or flat of multiple occupation (HMO). Provision in this part of the private rented sector can be very limited, or inaccessible to people on benefits.
The current one-size-fits-all approach doesn’t reflect the difficulties that some people can face finding, and living in, appropriate shared accommodation. There are exemptions for some groups, such as for care leavers or disabled people, that mean they can access a higher LHA rate. But these exemptions tend to be narrowly drawn.
Shared housing may not be accessible
An expectation that young people share their accommodation is reasonable to many people. Some might have happy memories of living with a group of close friends in early adulthood — like at university, where sharing accommodation is seen as something of a right of passage. And it can make financial sense, with shared living costs being a crucial way to make ends meet when setting out to live life independently
But this situation doesn’t reflect everyone’s experience. Many large houses in multiple occupation (HMO) are reserved exclusively for students. Where more informal arrangements exist, well-meaning attempts by people to find like-minded housemates can act as a form of gate-keeping that can exclude people from opportunities to share. Research from Crisis in 2012 found that in Leeds and Birmingham, less than 2% of all advertised rooms were both affordable and accessible to people on the Shared Accommodation Rate. Since then, little has changed to make this part of the housing market more hospitable to those who rely on this support.
When sharing doesn’t work
In theory, living with other people should help to bring down housing costs. Splitting bills, maybe even shopping and cooking meals together, can all help to lessen the excess costs faced by people living alone, as shown by the graph below. Successful arrangements like this often means living with friends, or at least like-minded people, usually in joint tenancy arrangements.
But these options aren’t open to everyone. People who lack the social support networks that can help to navigate difficult housing market conditions have little choice but to try to find rooms in shared houses with strangers. Even where this kind of arrangement might be affordable, it’s often associated with poor quality housing.
The low rate of SAR means that, where it’s an option, young people may be stuck living with parents well into adulthood. This can impact people’s mental health and reduce their independence. Some people lack this support altogether, increasing the unfairness of the system.
For those forced to seek rooms in HMOs, our advisers suggest there are personal circumstances — such as struggling with substance abuse or suffering from poor mental health — which can make living in such places very difficult.
It’s also wrong to assume that just because someone is single, they have no caring responsibilities. The SAR can mean that people with shared care arrangements for children from previous relationships are unable to provide them with a safe place to stay. It also means that single people who are pregnant are expected to live in shared accommodation up until the day their child is born, preventing them from preparing a home for their baby.
People in such circumstances often choose not to live in shared housing, meaning that they have to cover their housing costs from elsewhere in their limited budget.
We need to rethink the SAR
Being provided with a lower level of housing cost support less simply because of your age is always going to feel unfair. In the current housing market, the link between sharing and support is unrealistic and arbitrary. What it means in practice is that young people, already at the sharp end of the cost of living crisis, are being given less than they need — often less than they are spending — to cover their costs.
We have a report coming out soon to examine the impact of the SAR being set at such a low level and the flaws in the calculations that set this rate. We would like to see a move away from the current blanket emphasis on shared accommodation for young people, towards a system that is better at supporting people on the basis of their needs rather than their age.
