New analysis by the National Housing Federation explores how much the taxpayer is forking out to private landlords in the form of Housing Benefit, with takings ballooning from £4.6 billion in 2006 to £9.3 billion last year.
The reasons for this growth are two-fold. First, there has been a 42% rise in the overall number of private renters receiving Housing Benefit since 2008. Second, Housing Benefit claims in the private rented sector (PRS) are much higher than in the non-profit housing association sector:
It costs £21 a week more to house a family in a PRS home than in a social home - £110 overall in comparison to £89.
Over a year this is an additional £1,000 per family being spent (£5,705 in the PRS compared to £4,638 in the social rented sector)
In London, the contrast is even starker with PRS payments at £64 per week more than to those in social homes - £3300 more each year.
The lack of affordable housing available means that a wider group of people need Housing Benefit. Today, nearly half (47%) of all families claiming Housing Benefit in the Private Rented Sector are in work – this is nearly double the proportion it was six years ago (26%). Similarly, Housing Benefit recipients renting privately now earned an average £4,000 more than on six years ago.
If all those housed in the PRS lived in affordable housing, the nation would save £1.5 billion a year – which, over the last seven years amounts to £15.6 billion. Homes in the PRS are not only costly, but they are of lower quality too with 1 in 3 failing to meet the English Housing Survey’s decent homes standard.
David Orr, Chief Executive at the National Housing Federation 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 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."