Private landlords pocketed £9.3 billion in Housing Benefit payments last year, more than double that for nine years earlier, research from the National Housing Federation (NHF) reveals.
New analysis into the UK’s “ballooning” Housing Benefit bill shows private landlords received £9.3 billion in Housing Benefit during 2015, up from £4.6 billion in 2006.
NHF says there are two main reasons for the substantial growth in the amount of Housing Benefit paid to private landlords. The first is a 42% surge in the number of private renters in receipt of Housing Benefit. Secondly, the value of Housing Benefit claims for private sector renters is far greater than for those in social homes.
According to NHF research, it costs £21 a week extra to house a family in the private rented sector than in a social home. Over a year, this amounts to an additional £1,067 per family – £5,705 compared to £4,638 for families in the social rented sector.
The difference is even greater in London, where Housing Benefit is £64 per week more than for those in social homes, or an extra £3,300 each year.
NHF says a lack in affordable housing has resulted in a growing number of private tenants in need of Housing Benefit to help keep a roof over their heads.
The figures also show nearly half (47%) of families in the private rented sector on Housing Benefit are in work, up from just 26% six years earlier, with an average £4,000 increase in income levels among private sector tenants over the same period.
If all those housed in the private rented sector lived in affordable housing, it would save the UK economy £1.5 billion a year, or a total saving of £15.6 billion over the last seven years.
[contextly_sidebar id=”kG8HzukK92YHnIcj5XHL7EIzzYv55Kl5″]NHF say homes in the private rented sector are not only more costly than social homes, one in three also fail to meet the English Housing Survey’s decent homes standard.
David Orr, Chief Executive at the NHF, said: “It is madness to spend £9 billion of taxpayers’ money lining the pockets of private landlords, rather than investing in affordable homes.
“Housing associations want to build the homes [our] nation needs. By loosening restrictions on existing funding, the Government can free up housing associations to build more affordable housing at better value to the taxpayer and directly address the housing crisis.”
A government spokesperson said the amount in Housing Benefit going to private landlords has been falling since 2012.
“The reality is we have taken action to bring the Housing Benefit bill under control”, the spokesperson said.
This article was last edited at 06:42 on 26 August 2016.