Housing benefit reform will cause private rents to rise

Robyn Hall

January 4, 2013

The Committee did not believe the target of saving £1.9bn of housing benefit by 2014-15 and the goal to prevent the £23bn spent on housing benefit was realistic.

In a written statement it said: “When set against the chronic shortage of affordable homes [however] the government’s identified benefit savings appear increasingly unachievable as high demand pushes up private rents and social landlords rely on rents of up to 80% of market rent to fund development.”

In a report by the National Housing, Home Truths 2012, it was claimed that last year 111,250 new homes were built while 390,000 new households were formed.

The Committee said with home ownership beyond the reach of many and the cost of renting privately rising by 37% over the past five years it was unsurprising that one in 12 families was now on a social housing waiting list.

The statement added: “The falling off of new housing supply combined with the increase in rents in both the private rented sector and the affordable rent regime generates pressure on the housing benefit budget bringing more households into dependence on it, including those in work.

“This will only continue and will lead to the savings indentified by DWP being missed. This conflict in government policy needs addressing.”

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