Private Renting for People who are Ready to Work

Entering work and moving into the private rented sector can be highly complementary. People who are work-ready may be more likely to have the skills to cope in the sector. They may also benefit from the opportunity to move more quickly out of supported accommodation.

However, service users who intend to go back to work need to think carefully about the financial implications both of working and of private renting, and plan carefully which change they should make first. They need to establish whether they are likely to be eligible for Local Housing Allowance or other forms of support and staff should read the page on the financial costs of private renting. Off the Streets and Into Work provide an Into Work Calculator which can be a useful tool for calculating the affordability of moving into work, and service users may also benefit from seeking specialist advice.

In the medium and long term private renting and employment can make for an affordable combination. However the initial costs of paying a month’s rent in advance may be particularly difficult to meet whilst receiving a salary a month in arrears. Service users and staff need to be realistic and plan for short term challenges, but also bear in mind the longer term outlook. This may include considering job security, any likelihood of career advancement and increased pay, and a ‘back up plan’ for how they would manage losing their employment.

Below you can find a summary of some of the benefits and disadvantages of moving first or seeking work first for staff and service users to take into consideration.

Benefits of moving into the private rented sector before seeking employment

• The cost of hostel rents can be prohibitive for someone in work and no longer eligible for housing benefit. Renting first can be a more affordable way of going back to work.
• Whilst discrimination by employers is against the law, people may suspect that local employers will recognise a hostel address, and that they will therefore be given more credibility in the jobs market with a private tenancy.
• Service users may be eligible for more financial support with the costs of moving into the private rented sector if they are still receiving benefits. Support may be available from the Social Fund and rent deposit schemes.

Potential Disadvantages

• Local Housing Allowance (LHA) is set at the median rate for the local area and in practice this can mean that it is often fairly generous, especially in more expensive areas. If a service user chooses a property at the full LHA rate and is then no longer eligible for this financial support once they move into work, their accommodation may become unaffordable. Service users who are considering working should therefore choose accommodation that would be affordable should their circumstances change, which would usually mean choosing a property at a lower rate than LHA. You can check local LHA rates using the LHA Direct website.
• Some landlords, especially in areas where there is a high demand for rental property, do not accept people who are in receipt of benefits.
• Service users should also consider what support structures they may need in place for the sometimes momentous transition into work. Some service users prefer to move into work whilst they still have the support of a hostel staff.

Benefits of starting employment before moving into the private rented sector

• Service users can look for employment in a wider range of locations, knowing that they will be able to choose accommodation close to their work.
• Service users may have a broader range of properties to choose from since some landlords are wary of taking people on benefits.
• Some service users prefer to move into employment whilst they still have the support of a hostel environment.

Potential Disadvantages

• Few rent deposit or rent deposit guarantee schemes accept people who are not recieving benefits. Additionally service users will not be eligible for a Budgeting Loan, Community Care Grant or other forms of support and will usually need to save up for these costs themselves. The case study below details the financial support that OSW offers to overcome some of these hurdles.
• Hostel rents can be prohibitively expensive for people in work.
• Service users who take on temporary work or whose pay changes from week to week will need to inform housing benefit each time and may find their benefits disrupted.

Good practice example: Transitional Spaces Project, Off the Streets and into Work (OSW)

The Transitional Spaces Project operates in London and Newcastle with funding through HM Treasury’s Invest to Save Budget and Communities and Local Government, and London Housing Foundation. This pilot scheme works successfully with single people with a variety of support needs living in supported accommodation, offering a stepped programme to motivate people to find employment and then their own home in the private rented sector. Key features in the model’s success include:

• Financial capability work. Many clients face financial challenges and the project coaches them to access banking facilities and address debts or other financial concerns. Sessions include better off calculations which not only establish whether a property is affordable, but also help clients to improve their financial knowledge and skills.
• Clients are offered employment support including CV writing and interview coaching, with the intention of entering work before moving into the private rented sector.
• A property coach works with clients to identify quality affordable properties and offers pre tenancy guidance. Events are held for clients to hear others’ experience of moving into the private rented sector and a lettings agent answers individual questions.
• After moving in, clients are offered resettlement coaching for six months to help resolve any issues and to sustain their tenancies.
• Financial grants are provided when clients complete crucial stages of transition including a job start grant of £250 and a Home Start Grant of £1000 to cover rent in advance and/or a deposit. These grants help cushion some of the expenses of starting work and moving home.
• Project staff are trained to use a coaching model combined with Information, Advice and Guidance. This is a highly motivational and empowering approach, in which clients are encouraged to believe in their ability to achieve their personal goals, and to take personal responsibility for their own plans for change.

Return to the main page on the Private Rented Sector.