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86% more UK workers claiming housing benefit

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23/10/2012
Coalition attempts to slash public sector spending have failed on housing benefit, as 86% more working taxpayers have been claiming housing support since 2009.

Government figures suggest 417,830 more working people have begun to claim since 2009, with a further 10,000 each month expected to join them.

Private rents are increasing at a faster rate than house prices, and the knock-on cost to the taxpayer is rising as a result, said the National Housing Federation.

David Orr, chief executive of the National Housing Federation, said:

“We now have millions of families struggling to keep on top of their rents, priced out of the housing market and nearly 10,000 more working families every month are now reliant on housing benefit to help pay their private rent.

He continued: “These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak.”

Analysis of the UK housing market called Home Truths 2012 from the National Housing Federation found both private rental and house prices are forecast to rise sharply from 2015.

The cost of privately renting a home has risen by 37% in the past five years and is set to soar a further 35% over the next six years.

Private rents will be stable through 2013, but could see steep increases from 2015 to 2018 of around 6% a year as interest rates rise and house prices increase.

The NHF said house building starts will recover only gradually, from 100,000 homes this year to 140,000 in 2014, but increases will flatten out from around 2016/2017.

David Orr continued: “Successive governments have failed to tackle the under-supply of housing and time is now running out. If we don’t urgently fix the housing market we will have a generation who are priced out of renting a home, let alone buying one.”

Brian Hall, founder of buy-to-let index, The Model Works, said: “With 850,000 young people turning 18 every year, it is naive to think we can simply build ourselves out of this situation and expanding the PRS will exacerbate the problem.

“In addition to coordinated action suggested by the NHF, we really need to understand the big picture and this requires collaboration between the DCLG, the DWP and the Treasury, as well as the lenders and builders, housing associations and the institutional funders.”

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