Local authorities in Britain are spending approximately £1.9 billion annually to provide "supported" accommodation for about 200,000 working-age individuals facing significant challenges such as addiction, recent release from prison or care, or domestic abuse. However, a recent inquiry reveals that the structure of these housing arrangements may discourage tenants from entering or remaining in employment due to financial penalties linked to work.

Supported accommodation tenants who are unemployed typically have their rent fully covered by the council. Yet, once they start earning an income, they become responsible for substantial rent payments that can quickly lead to debt. Data from the inquiry shows that only around 4 percent of supported tenants are in employment. The average monthly rent for a room stands at £1,250 nationwide, rising to an average of £1,650 in London. Additionally, tenants often face service charges reaching up to £200 per month, further increasing their housing costs.

Individual cases highlight the difficulties tenants encounter. Harry, 31, entered supported accommodation after leaving care at 18 and was completing an apprenticeship at the time. Within six weeks of moving in, he was threatened with eviction over rent arrears and advised by support workers to quit his job to avoid accumulating debt. After resigning, his universal credit was sanctioned because he left employment voluntarily. Similarly, Kiera, 29, has spent a decade living in supported housing and says that securing full-time work would make her temporary accommodation, which she described as infested with cockroaches, unaffordable at around £1,400 per month. She expressed that, were the costs lower, she may have held a job throughout her twenties.

Support staff and council employees across the country have reported that advising tenants to avoid work is common practice due to the financial risks involved. Ella Spencer, who works in a supported accommodation hostel in London, noted that although most tenants want to work, they frequently find they are financially better off on benefits. Jane Gregory of the Survivor Project, which assists domestic abuse survivors, described the system as akin to "printing money" for landlords, emphasizing that taxpayers ultimately cover the expenses. She also pointed to the high rents as a major barrier keeping tenants reliant on benefits.

In response, new government regulations implemented on October 5 aim to alleviate these issues by allowing supported housing tenants to earn more before their housing benefits are reduced. Despite this, calculations indicate that a tenant working full time at minimum wage would still retain only £3.20 for every additional hour worked, highlighting ongoing challenges. A government spokesperson stated that the changes “end the cliff edge” for approximately 325,000 people in supported or temporary accommodation, enabling them to keep a larger portion of their earnings when taking up or increasing paid work.