Nathan Baber, External Affairs Intern, Money and Mental Health Policy Institute

Mental health and the housing crisis: getting it right for private renters

6 April 2023

The housing crisis in the UK has led to a significant increase in rents, but how is this impacting renters’ financial and mental health? Now that the median monthly rent in England is £800 (£1,475 in London) many renters are struggling to keep up. Research from the Joseph Rowntree Foundation shows that private renters are twice as likely as homeowners to suffer from anxiety.

The cost of high rents

Individuals on low-incomes, and those who rely on benefits to make ends meet, are particularly affected by high rents. The added pressure can be overwhelming. Our research has shown that the situation can be even more challenging for people with mental health problems. Often, the burden of managing rent payments can exacerbate their condition. 

Our Where the heart is report’s survey found that 63% of respondents cited changes in mental wellbeing as reasons for falling behind on rent payments. Employment changes were the second most common cause, with 50% of respondents indicating it as a factor.

“There is a local housing allowance for rent but it’s around £300 per month… there is a lack of affordable housing and you can’t find a private rental for less than £450 a month.” Expert By Experience

“Private rents are extortionate for sometimes poorly maintained or unsafe properties and there’s no chance of getting council property.” Expert By Experience

Support while privately renting

The UK government has acknowledged the crucial role of affordable housing in maintaining good mental health, but there is still more work to do to address the ongoing crisis for those of us with mental health problems. While the government’s current focus is on increasing the supply of affordable housing in the long term, more needs to be done in the short term. Without this, individuals with mental health issues risk falling behind on their rent payments.

People with a mental health problem are 50% more likely to live in rented housing than those without. For these people, the continued record rises in private rents, and the subsequent unaffordability of housing, means that many are finding themselves priced out of quality affordable housing.

For those receiving benefits while privately renting, the Local Housing Allowance (LHA) rates are key to offering sufficient housing support. The Department for Work and Pensions (DWP) uses LHA rates to calculate Housing Benefit for tenants renting privately. However, as our No one left behind report shows, there is a significant gap between prevailing rents and the amount that people claiming Housing Benefits receive, which varies across the UK. In England, the median monthly gap between LHA rates and rents is £100, rising to over £200 in parts of London and the south east. This lack of support leaves people with limited options.

To address this, the UK and devolved governments should increase LHA rates to cover the 50th percentile of local rents. This would mean someone in receipt of LHA should be able to affordably rent a property that costs within the bottom half the market (instead of just the bottom third, as it is now). The government should also abolish the Benefit Cap, which can prevent people from receiving full housing support. This would help people with mental health issues receive the housing support they need without arbitrary limits on the amount of support available.

Reforming welfare support to address income shocks

While these reforms to LHA rates would be welcomed, there is still more that must happen to address the root causes of people with mental health problems struggling to meet the increasing cost of housing. People with mental health problems can experience income shocks due to the intermittent nature of employment caused by their condition. This can make it challenging to avoid and resolve arrears, especially when facing increased rent and housing costs. 

While the welfare system is intended to support people in times of need, recent changes to entitlements under welfare reform have presented challenges for people experiencing mental health problems. Reductions in benefit entitlements, including under-occupancy penalties and council tax benefit reform, have resulted in reduced payments for housing costs. Tenants are now required to cover any shortfall between benefit payments and their rent.

Getting it right for renters

To address these challenges, the UK and devolved governments should review and reform welfare policies to better support people with mental health problems. This should include increasing benefit payments to cover housing costs, and simplifying the notification and application processes to make it easier for individuals with mental health problems to access the support they need.

Housing is a human right, but the challenges faced by private renters are clear. These challenges are especially acute for those of us experiencing mental health problems. The government should commit to making housing more affordable, along with reforming housing support, to ensure that we can all afford a place to call home.