At the end of 2021, independent think-tank the Resolution Foundation conducted research to gain insight into the 2022 housing market. Their findings suggest a storm might be brewing for families in social housing. Many households might find themselves in rent arrears if they don’t act now, especially with a forecast of rent hikes in April 2022. Here’s what you need to know and how you can weather the storm.
What rent increases are families in social housing facing?
According to the Resolution Foundation, “Social rents can currently be increased by up to CPI plus one percentage point each year, and as a result, those living in local authority or housing association homes could see their housing costs rise sharply in April 2022.
“The 4.1% rent hike they may face (based on September 2021’s inflation figure) will be the largest rise for a decade – inflating the rent of the average family in social housing by £202 per year. And though this is a ceiling on rent increases, and not a requirement, it seems very likely that the majority of housing providers will apply the full amount.”
Why will this rent hike hit households harder?
I’m sure you’ve noticed that the cost of goods and services has increased in recent months due to the impact of supply problems and shortages caused by the pandemic. The expected rent hike will likely coincide with:
- The government’s planned tax rises
- An increase in household utility bills, especially when the energy price cap rises
- A likely further increase in the base rate if inflation continues to soar
How can you weather the storm?
Here are four steps you can take to stay afloat in the coming months.
1. Claim Universal Credit if you’re eligible
Universal Credit could help soften the rent hike blow, but the Resolution Foundation points out that many families in social housing aren’t receiving it. It certainly doesn’t hurt to check whether you’re eligible for it.
2. Check what other benefits you might be eligible for
It’s already clear that rent is not the only cost that’s rising. You may have already started to feel financial pressure from the increasing cost of living, which is only expected to get worse.
Ease your financial pressures by checking whether you’re eligible for other government benefits based on your individual circumstances.
3. Cut back on costs
It might be time to review your finances and cut back on those unnecessary expenses. It’s a good idea to talk to other family members to identify these expenses. You might be surprised at the amount of money you spend on goods or services that you might not really need or are not currently in a position to afford.
Similarly, consider steps you can take to avoid high energy bills. Such steps can also help you prepare for the expected energy price cap rise in April 2022.
4. Start a side hustle
It’s not too late to look for easy ways to increase your income passively. You don’t even have to invest much to start making good money alongside your primary job. Take a look at these five side hustle ideas to get you started.
The post How can families in social housing weather the brewing rent hike storm? appeared first on The Motley Fool UK.
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