Thousands of Families Need Benefits To Pay Rent

The National Housing Federation has released a report called ‘Home Truths 2012’, an analysis and forecast of England’s housing market, in which the housing market is described as ‘unsustainable’, as 10,000 more working families are drawing housing benefit to help pay their private rent.

The Government’s efforts to manage public debt is being hampered by the vast increase in payouts for housing benefit. There are 417,830 more working people on housing benefit than in 2009, an increase of 86%.

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. These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak. This cannot continue; we need action now to address the causes of rising housing costs, not just the symptoms. Only by addressing the chronic undersupply of new homes can we stem the financial pressure on families and Government.”

The report found that the cost of privately renting has gone up by 37% in the past five years, and is expected to increase a further 35% over the next six years. Private rents are expected to be stable through 2013, but may well soar from 2015 to 2018 at 6% a year as interest rates rise and house prices increase.

The weakened economy will see modest falls in house prices into 2013, but demand conditions will support the renewed growth of house prices at 5-6% a year across England from 2015 to 2017.

In 2011, 390,000 new families were formed, but only 111,250 new homes were built. House building is expected to recover gradually, from 100,000 this year to 140,000 in 2014, and then will flatten out from around 2016/17, still well short of meeting demand.

David Orr continued, “The housing market is at the point of no return; with rising house prices, rising rents and millions of families really struggling to afford their home. It’s no surprise that one in 12 families in England is on the waiting list for social housing. Sadly the future is looking even bleaker.

“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.

“High housing costs put financial pressure on both families and the Government. When people can’t afford the homes they need, it stops them from moving for work, it prevents young couples starting families. Aspiration is stopped in its tracks.”

The National Housing Federation has called upon the Government and the whole housing industry to work together in a long-term partnership to tackle the mounting market troubles before it becomes a crisis. To get things in motion they will require public support, and have set up a new campaign called ‘Yes to Homes’, with which they hope to encourage more people to speak up in support of more new homes.

In response, housing minister Mark Prisk, speaking on Radio 4’s Today programme, agreed that successive Governments had failed to build enough homes. He said, “We are not complacent about the challenge.”

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