The case for furnished tenancies

Prevalent in the PRS, furnished tenancies remain scarce in social housing despite millions of tenants facing poverty. Helen Campbell of FRC Group explains why landlords must change their ways.

Furniture poverty is on the rise and thousands of families and households across the UK are struggling to afford or access the essential furniture items they need to make a home. This problem lives behind closed doors, shielded from the view of friends, family and Housing Officers.

The changing picture of poverty across the UK combined with the impact of welfare policy changes mean that the situation is about to get worse. According to The Joseph Rowntree Foundation, one of the UK’s foremost experts on poverty and disadvantage, the number of social housing tenants in poverty in 2014/15 was 4.6 million, or 43 per cent of all social tenants.

A closer look at the report’s historical findings revealed little change since the last estimation in 2004/05, which recorded 4.7 million povertystricken social tenants. In the private rented sector, the number of people in poverty had more than doubled, with 4.5 million tenants in 2014/15 compared to 2.2 million 10 years earlier.

To compound this bleak picture, increasingly families are not able to make savings. The proportion of households in the poorest fifth with no savings has increased by 12 per cent over the past 10 years to 69 per cent in 2014/15. Lack of savings has big ramifications for those facing furniture poverty, who often incur large upfront costs when having to replace essential white goods, for example. With the introduction of the latest welfare cuts, the number of people struggling to afford new or replacement furniture looks set to increase.

Tackling furniture poverty

This situation should be highly concerning to social landlords charged with housing some of the most vulnerable and socially disadvantaged. In addition, furniture poverty poses a significant threat to the business success of landlords, as tenants without essential furniture items are far less likely to be able to accept or fulfil their tenancy agreement. Ultimately, this can result in higher void rates, costs and arrears for the landlord.

Local welfare provision

One of the most important ways to access furniture for those on low incomes is through local welfare provision (LWP), or local welfare assistance schemes run by the local councils. These funding streams, devolved from the Social Fund in 2012, are an emergency safety net for people in need, from families fleeing domestic violence to those who had been affected by fire or flooding.

However, LWP is by no means a panacea. With the funding devolved to local council level, the extent of provision varies widely across the country, creating a ‘postcode lottery’. Councils also have vastly different resources available and some have axed their schemes altogether. The list of available items and eligibility criteria vary, meaning that some low-paid working families may be ineligible. It’s therefore clear that LWP cannot be a solution for all those in dire need.

Furnished tenancies

Another solution is for tenants to use second hand furniture. However, the quality and availability of certain essential furniture items such as carpets or white goods may not always be suitable for a household. Another potential solution is for a household to access extra money for furniture through an affordable credit provider such as a credit union, or use a budgeting loan. However, poor credit history and very low income may render these options unavailable, leaving tenants to opt for high cost loans or rent-to-own stores which offer quick fixes, but the higher cost of credit could create a vicious cycle of debt.

There is another solution that some social landlords are using to turn the tables on furniture poverty: furnished tenancies. These have proven to be hugely beneficial for disadvantaged tenants who need help to tackle their financial problems. Research from the Human City Institute revealed provision of furnished tenancies is of highest priority for tenants experiencing financial difficulties; ahead of landlord offered banking or budgeting help. Usually associated with the private rented sector or the desirability of hard-to-let stock, furnished tenancies are a proven solution for furniture poverty.

Outcomes include:

• Meeting urgent housing need
• Improving housing management performance: increasing occupancy rates and reducing tenancy churn resulting in lower void loss and lower tenant rent arrears
• Maximising local income and effectively tackling poverty
• Creating social value through increasing confidence of tenants, increasing their time to do alternative activities such as seeking employment

In a society where furniture poverty is only increasing and tenants have limited options, furnished tenancies can offer gains for both the tenant and the landlord. It’s time to turn the tables and make furnished tenancies available to those who need them.

Helen Campbell is a campaigns officer at FRC Group