A new report by the National Housing Federation claims that rising rents in growth areas such as London are pushing more and more working people over the edge, forcing an extra 310 people every day to turn to the Government for housing benefit to keep the roof over their heads.
The report, entitled “Home Truths”, says that while economic growth has returned to many areas, this has caused the already over-stretched housing market there to overheat. Meanwhile, in parts of England where green shoots are nowhere to be seen, high unemployment and low wages mean families are desperately struggling to make ends meet and communities are at a standstill.
Hard-pressed taxpayers have picked up the tab of £12.1bn spent on housing benefit for working people since 2009, at a cost of an extra £1.7m a day, as successive years of not building enough homes in areas of growth have pushed rents beyond what ordinary working families can afford.
By 2020, the picture will be even bleaker. House prices will have risen to the point that an entire generation will be locked out of home ownership and forced to rent for life. But rents too are forecast to soar by an average of 39% by 20203, causing further severe financial consequences for the taxpayer.
David Orr, chief executive of the National Housing Federation, said: “We hear a lot about ‘making work pay’, but a decent job won’t even cover the cost of a home in England. Billions of pounds of taxpayers’ money is wasted, lining the pockets of private landlords, when it could be better spent building more homes people can afford. Relying on the private rented sector so heavily is a costly sticking plaster rather than a solution.
“In towns and cities pulling away from the recession the dysfunctional housing market is burning the fingers of many people. Hard-working families are spending more and more of their income on a home and many could be forced to move - away from jobs, schools and relatives. We need to address the problems of the housing market now, before another generation is left locked out and reliant on taxpayers to keep the roof over their head.”
Meanwhile the Residential Landlords Association (RLA) has advised landlords to get themselves up to date on changes to housing benefit.