Families on housing benefit are being driven to live in areas of high crime and low employment because only one in 20 private rented homes are now affordable – the lowest level on record, new analysis reveals.
A freeze on housing benefit rates since April 2020 and waves of rent hikes have pushed the number of homes on the market that can be paid for through welfare down from 23% in April 2020 to 5%, according to the Institute for Fiscal Studies. Around 2 million households in England and Wales receive housing benefit.
Dave Lockyer, who is disabled with a 16-year-old son, told the Guardian it recently took him six months to find a flat in Woking that was within his welfare budget. The process was “insane”, he said, and left him facing homelessness or being moved to emergency accommodation in Essex, hours from his son’s school.
The problem represents a new front in an increasingly urgent housing crisis that is already seeing mortgage holders facing a huge financial squeeze from soaring interest rates and private landlords threatening to sell up. Meanwhile, social housebuilding remains modest; just one in five of all new homes are built by housing associations or councils. On Tuesday, the latest annual rough sleeping figures for London are set to be published amid fears that the problem is again getting worse.
The freeze in housing benefits also means renters are being forced into homes that are less well-insulated. The IFS found that affordable properties had heating and hot water costs that were 19% higher.
Polly Neate, chief executive of Shelter, the housing charity, said: “We have families coming to us who are forced to put up with disrepair like mould and damp because they can’t move anywhere else that’s covered by housing benefit. We’re also regularly hearing from people who have been given an eviction notice and are facing the real threat of becoming homeless because they can’t find anywhere they can afford locally as rents are skyrocketing.”
Rents on new lettings advertised on Zoopla increased by 10% or more every month from February 2022 to January 2023, and new-let rents are up by a fifth since September 2019.
“It’s crucial that the government unfreezes local housing allowance and ensures it reflects market rents so that families aren’t forced to choose between homes that are unsafe or homes they can afford,” said Darren Baxter, policy adviser at the Joseph Rowntree Foundation, which funded the IFS study.
Lockyer, 51, said he searched almost every day for almost six months for places within his monthly housing allowance of £1,096 in Woking for a two-bedroom flat.
“You get zero results, then one result, but it’s out in the middle of nowhere with no public transport. You occasionally get one or two come up, but then you get the other barriers – you’re on benefits so they want six months’ rent in advance or a guarantor.”
He eventually found a place with only hours to go before he would have been made homeless. “We would have been God knows where in emergency housing, which they said might be Southend, it might be Buckinghamshire,” he said.
He called for ministers to introduce rent controls and said: “If you put the local housing allowance up and don’t do anything else, the landlords will just put rents up to match.”
A government spokesperson said: “We’re helping ease the pressure of rising rents by maintaining 2020’s £1bn boost to Local Housing Allowance rates, giving more than a million people an extra £600 a year on average.”
Local Housing Allowance rates were increased in 2020, but ever since they have been frozen, during which time rents have kept rising.
“We are set to spend over £30bn on housing support this year, on top of significant cost of living support worth an average £3,300 per household,” the spokesperson added. “Building more affordable homes is key, which is why we’re investing £11.5bn to deliver more social and affordable rented homes across the country.”
