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Government to spend £70bn housing benefit tenants in private rented homes

tenants housing benefits

The extent of the Government’s reliance on private landlords to provide housing for those on benefits after years of under-investment in affordable homes has been revealed.

New research shows that private landlords will receive more than six times in housing support payment than the government is expected to spend on affordable housing during the five-year period from 2021 and 2026.

Analysis by the New Economics Foundation (NEF) reveals that the government is set to subsidise private landlords by more than £70 billion through paying them housing support but will only spend £11.5 billion on affordable homes.

It follows a decision to lift the freeze on Local Housing Allowance in the autumn statement so that housing benefit will cover the bottom 30% of local rents from April – although these will be re-frozen in April 2025.

Prop up

The think-tank says the increase means that even more public funds are being used to ‘prop up’ a private rented sector “riddled with poor quality housing and many ineffectual landlords, instead of investing in affordable social housing”.

The Mirror newspaper has gone even further, saying the funding proves reveal landlords are ‘lining their pockets’.

NEF says its poll proves tenants in the PRS are forced to endure ‘rising rents, poor conditions and unacceptable treatment by landlords’.

Almost 40% of private tenants who have moved in the 12 months experience damp and mould in their property while more than 20% of these tenants have seen their landlords raise the rent mid-way through the tenancy without agreement.

Broken

Senior researcher Alex Diner (pictured) says the government is spending billions subsidising a broken system. “It is extremely inefficient for the government to be paying this money to private landlords when it should be building more new, genuinely affordable homes and improving the quality and security of tenure for the homes we already have,” he adds.

“To overcome this mess, the government must build more social homes to meet the rising demand for affordable housing, reverse its U turn to loosen energy efficiency standards in the private rented sector and improve its plans to regulate private renting.”

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