Last updated: 23 July 2026

'Stepping Stone' accommodation is a form of transitional housing provided by registered providers of social housing or charities to help individuals to move towards independent living. Accommodation is typically offered at a discounted or affordable rent for a limited period and is aimed at people who meet specific eligibility criteria, such as young people leaving supported accommodation. The Renters' Rights Act introduced stepping stone accommodation as a new statutory category of accommodation. 

Below are two case studies from organisations who support young people experiencing homelessness. Both write about their model of ‘stepping stone’ accommodation and how this bridges the gap between traditional supported housing and fully independent living for young people.

New Horizon Youth Centre – London

Young people transitioning out of supported accommodation, as well as those in low paid employment, apprenticeships, or early-stage careers, often face a significant gap in the housing system. While many are considered too independent for high-support accommodation services, they frequently continue to require tailored support to sustain their progress and navigate the challenges of independent living. At the same time, high housing costs and limited affordable options mean they are often unable to access secure accommodation within the private rented sector. As a result, many young people experience housing instability, sofa surfing, overcrowded living arrangements, or homelessness, despite taking positive steps towards employment, education, and greater independence.  

This challenge is particularly acute in London, where high private rental costs create substantial barriers for young people on low incomes, in entry-level employment, in training, or moving between jobs. Even where young people are motivated and capable of sustaining a tenancy, a lack of affordable move-on accommodation can undermine the progress made through earlier support interventions.  

There is a clear need for accommodation models that bridge the gap between traditional supported housing and fully independent living. Such models provide affordable, stable accommodation alongside flexible, person-centred support, enabling young people to build confidence, develop independent living skills, and sustain employment or education. By offering a gradual transition rather than a cliff-edge move into the private rented sector, these pathways help prevent homelessness, promote long-term tenancy sustainment, and support positive outcomes across housing, wellbeing, and employment.  

Stepping Stones Accommodation  

New Horizon’s various schemes are designed to provide a structured progression route for young people who are ready to move beyond supported housing, but who would benefit from a more gradual transition into independent living.  

Young people are assessed for suitability and offered accommodation within a shared housing setting. This provides immediate housing stability while encouraging residents to develop positive tenancy behaviours, including rent payment, budgeting, property maintenance, and shared living.  

Young people who successfully sustain their tenancy can progress into more independent accommodation within the pathway. This step-down approach enables individuals to continue building confidence and independence while maintaining access to a supportive housing environment.  

A key operational feature of the model is the affordability of the accommodation. Through a Service Level Agreement with a partner organisation, rents are subsidised and set at the Local Housing Allowance Shared Accommodation Rate. This ensures accommodation costs remain accessible to young people who may be in either low paid employment, receiving benefits, undertaking training, or experiencing temporary unemployment. The affordability and accessibility of the accommodation also reduces financial stress, enabling residents to focus on career and independence progression rather than immediate housing concerns.  

The subsidised rent model acts as an important safety net. Rather than facing the financial pressures associated with market-rate accommodation, residents are able to maintain housing stability during periods of changing circumstances, reducing the likelihood of rent arrears, tenancy breakdown and repeat homelessness.  

Key Success Factors  

Several elements have been critical to the success of the model: 

  • Affordable rents linked to the Shared Accommodation Rate 
  • Partnership working through a formal SLA arrangement 
  • A clear progression pathway from supported housing to greater independence. 
  • Flexibility to support residents through periods of changing employment or income 
  • Access to safe, well-maintained accommodation in communities with good transport and employment links 
  • Light-touch support that promotes independence while remaining available when needed 
  • Rent/deposit & resource support for move on into PRS  

St Basils - Birmingham

For many young people, finding somewhere affordable to live is out of reach.  They are often in low paid, entry level jobs and therefore paying rent from their earned income is unrealistic. The only way it stacks up is if individuals have a support network subsidising them.  This puts additional pressures on families who may also be experiencing the impacts of rising costs. 

For young people who have been homeless or are at risk of homelessness, this creates even greater barriers.  Many are stuck in accommodation that is reliant on them staying on benefits.  If they take up work, they could face eviction.  Why would you work if the roof over your head is under threat?   

The Live and Work model was created in answer to this question.  How low would rent have to be for someone to be able to afford to work, without having to navigate the benefit system?  Critically, this is not supported accommodation, we think of it as supportive.

St Basils opened the first live and work accommodation in 2015.  We partnered with Sandwell and West Birmingham NHS Trust to bring into use former accommodation quarters.  There were 32 units and rents were kept below £45 a week.  An affordable housing solution that also provided employment.  True partnership working.  From there, we created the youth village, which brought the total number of units to 86 and have recently opened an 80 unit building in Birmingham.  

Recently, we completed the 10-year evaluation, available here.

The headline figure?  For every £1 it costs, there is a £7.93 return to the public purse.  That’s young people paying rent, paying NI and tax, and not claiming a penny in benefits, alongside reduced costs to public services because of improvements in mental health and well-being. Young people thriving and contributing to society.  Everyone wins. 

There are key things to consider if you are looking at providing this type of accommodation.  Our experience is that debt free schemes with future-proofed works are the most effective way of deflating rents. Funding partners are therefore critical. In our case, this included Homes England, Local Authorities (section 106 funding), and charitable funders as well as development partners contributing social value services.  

These schemes are designed to break even, including a marginal contingency provision.  They deliver social impact and contribute to social justice.  An effective lettings plan and referral pathway is critical to minimise void loss.   

The model is a Stepping Stone, which is the overarching name given to this type of accommodation in the Renters Right Act (Ground 5H).  In our experience, most young people stay for up to two years.  It gives them time to save before moving on with choices.   

Homes and Jobs are interdependent protective factors.  If we are serious about both, we need a model which enables young people to live and work without the complexities of dual navigating benefit systems and work. We hope our learning is helpful and encourages other services to develop the model in your area, and collectively make it part of a national youth housing offer.