Homelessness and unemployment: how people get trapped

For some private landlords – particularly those at the cheapest end of the market, who people making their way out of homelessness are most likely to rent from – a tenant who receives benefits and does not work is actually preferable, especially if they are exempt from the benefit cap. For many of our guests who receive Universal Credit, the ‘housing element’ (ie money for rent) is paid directly from the government to the landlord, meaning that they have a guaranteed rental income.  Some landlords worry that if their tenant is reliant on income from working, they might have their hours reduced or be fired, which would make it harder for them to pay rent.

This is an issue discussed extensively in a 2024 report that researcher Becky Rice wrote for Commonweal Housing, which Glass Door Homeless Charity contributed to. Here is an excerpt from the report: “The costs of accommodation mean that people are trapped in worklessness because foregoing housing benefit to work on a low and potentially variable income makes rent unaffordable. [...] landlords also view employed tenants as a riskier prospect.”

One additional complexity is that our guests often have jobs which are transitory, insecure and/or low-paid. A lot of people who are working still rely on their income topped up with benefits to make ends meet, while others might have an income that varies widely from month to month. This can make it especially challenging to find housing.

Similar issues occur in supported housing, which is a broad category that the government defines as “accommodation that is provided alongside support, supervision or care to help people live as independently as possible in the community”. There are various reasons why supported housing might be appropriate for someone – because of age, a physical or mental health condition or because of having experienced domestic abuse or homelessness. A lot of people making their way out of homelessness might need support temporarily, but then want to move towards other forms of housing. For young refugees, supported housing is often the only immediate alternative to homelessness.

However, some people become stuck in supported housing even after they no longer need support, because if they work more than a certain number of hours a week, their benefits will be sharply reduced and they will be unable to pay rent, which is more than the Local Housing Allowance rate. This means that they have no opportunity to save up for a deposit that would allow them to find accommodation in the private rented sector.

This problem, sometimes called the ‘benefit trap’, is one we have mentioned previously, when our Co-Head of Casework, Boguslaw, said the following:

"Supported accommodation should act as a jumping off point for people who have experienced homelessness to get their lives back on track and move towards a stable living situation and employment."

“Unfortunately, the way it works currently means that far too many people get stuck in the supported accommodation system rather than being able to use it as a stepping stone.”

Last year, we signed an open letter to Chancellor Rachel Reeves about this issue. The letter explains how people in supported accommodation find that “their housing benefit is tapered faster than their pay would increase if they started working more hours – leaving them with less overall income”.  It also called for the Chancellor to “Make Work Pay ... by lowering the Housing Benefit taper rate and increasing the applicable amount available under Housing Benefit.”