Put community solutions front and centre

In October 2022 we saw the rate of inflation reach a 41-year high with an 11.1% increase. According to the Office for National Statistics it has been reported that 9 in 10 people found their cost of living had increased in comparison to one year ago. The Office for Budget Responsibility expects that post-tax household income will fall by 4.3% in 2022-23, which will be the biggest fall since comparable records began in 1956. So how is this likely to affect landlords and tenants in the social housing sector? Tensions arise The intention of social housing is to provide stable, good quality affordable homes for those who need it. There could be a number of reasons why a person chooses to seek social housing accommodation. However, one of the major driving factors is affordability for low-income families. The increases in the cost of living, including potential increases in rental charges, could severely impact families who are already suffering. The inability to maintain financial stability could seriously impact the health and wellbeing of tenants and we are likely to see an increase in those suffering with mental health issues as a result. This puts landlords and tenants in conflict with one another as the rental income is a landlord’s main source of income, which in turn is used to maintain homes and helps to build new ones. Following publication of Social Housing Rents: Government Response to the Consultation in December 2022, the limit on annual rent increases remains at CPI + 1% subject to a 7% ceiling. Even with this 7% cap, the social housing sector could see a significant increase in rent over the 2023-2024 period. The driving force behind the decision to increase rents will directly correspond with the cost of providing affordable housing to families across the nation, in particular, the cost of maintaining and building new properties. With more families than ever facing the impact of rising costs there is a greater need for more social housing properties to be built to combat homelessness. In the absence of further funding, social landlords will be reliant on rental income to fund such projects. In addition to development, both repairs and maintenance of current housing stock is at the forefront of landlords’ concerns following the tragic death of Awaab Ishak in 2020. Social landlords will need to increase budgets and spend to ensure compliance with both their statutory and contractual repairing duties. In some cases this will involve a huge initial investment to ensure the health and safety of all tenants. This conflict of interests and competing priorities between tenant and landlord has the potential to fuel disengagement and dissatisfaction between the parties. As solicitors acting for social landlords, we have already seen a decline in this relationship and an increase in litigation due to this breakdown. Communication is key So what can landlords do to help tenants and vice versa? While the cost-of-living crisis remains out of our control, communication between landlord and tenant is key. Landlords and tenants need to maintain a good line of communication to ensure that the time, cost and stress of unnecessary litigation is avoided and tenants have access to the appropriate support through these difficult times. Landlords have the resources to assist or to direct tenants to third party assistance in cases where tenants are struggling to maintain their tenancy. For example, if a tenant cannot afford to pay rent they should seek assistance from their landlord instead of allowing their rent arrears to accumulate without reason. Landlord and tenant can work together with support agencies to resolve or mitigate financial issues before rent arrears spiral out of control. Obtaining support in these circumstances is in the best interests of both parties. Landlords need to ensure that communication is readily available and accessible whether that be by telephone, email, text, contact form, social media or scheduled meetings. Landlords need to take a proactive approach in identifying and engaging with those in need, particularly those who may be vulnerable. Most importantly, landlords need to ensure that their policies and procedures are updated to ensure such communications are actioned accordingly and consistently. Information on maintaining a tenancy is not always readily available and therefore it may be helpful to both landlords and tenants to provide information packs to assist with the most common issues that a tenant may face, for example, house maintenance, preventing mould and pests, how to manage finances and claiming benefits. This type of information could free up services to deal with other issues as well as assisting in maintenance of properties by identifying minor issues before they escalate into more costly repairs. To battle the cost-of-living crisis and continue to provide and develop safe affordable homes, the social housing sector must work as a community to protect the financial stability, health and wellbeing of tenants and provide the sector with the best opportunity possible to continue and develop. Landlords should be turning to litigation only as a final resort when all other avenues of support have been exhausted. It is becoming routine that courts are expecting all attempts of engagement and offers of support to be evidenced as part of proceedings with parties being sent away to explore alternative options should the courts be dissatisfied. Rebecca Eastwood is an associate solicitor in the real estate  housing & regeneration team at Brabners Image © Richard Gardner/Shutterstock