Renters who receive housing benefit are struggling to find a place they can afford and it could lead to rising homelessness unless the government raises benefits, Crisis and Zoopla has warned. Image: Robert Linder / Unsplash
Homelessness charity Crisis and property website Zoopla has urged the government to increase housing benefit when parliament returns in September after finding nearly half of English local authority areas had fewer than 20 genuinely affordable one-bed homes listed.
Housing benefit has been frozen since March 2020 when it was set at 30 per cent of rents based on data collected between September 2018 and September 2019. But since the pandemic, rents have surged, squeezing the number of homes available for the 1.2 million people on the lowest incomes who receive housing benefit.
“It is deeply troubling that the poorest households in England are being forced to fight over a meagre number of affordable homes or stump up thousands they simply don’t have in order to find somewhere to live,” said Downie.
“Enough is enough. The government can no longer ignore rising rents in the cost of living crisis – it must urgently invest in housing benefit so it covers the cheapest third of rents and put in place a plan to deliver the social homes we are crying out for, if people are to have a fighting chance at finding a home they can afford.”
Following analysis of one-to-three bedroom properties listed on Zoopla between May 2021 and April 2022, the property website found one in eight properties to rent last year were affordable for people on housing benefits.
Crisis and Zoopla found, on average, households were facing shortfalls larger than the most recent government figures suggest.
Analysis from the Valuation Office Agency, published in January, estimated renters were being forced to find £313 extra every year to cover rent above housing benefit for a one-bedroom home. For two-bedrooms the gap was £371 while it rose to £498 for a three-bedroom home.
But Crisis and Zoopla found the gap for a one-bedroom home was £648, rising to £1,052 for a two-bedroom home and £1,655 for three bedrooms.
The shortage of available affordable homes is particularly acute for one-bed homes. In almost half of the local authorities in England, the report found fewer than 20 affordable one-bedroom properties listed in the last year. That’s despite single people and couples without children who would find a one-bedroom property most suitable making up 44 per cent of the people receiving housing benefit.
The undersupply means that while 17 per cent of one-bedroom homes are affordable – compared to 11 per cent of two-bedrooms and 10 per cent of three bedrooms – smaller homes face the biggest affordability gap.
In parts of London housing benefit barely covered any properties. In Newham, there were no affordable one-bedroom homes listed on Zoopla over the year while just 2 per cent of properties in Wandsworth and 5 per cent in Tower Hamlets could be afforded.
In cities like Sunderland just 8 per cent of one-bed properties listed would be covered in full by housing benefit, this rises slightly to 9 per cent in Cornwall while in Salford, where Zoopla said rental increases have been sharpest, just 4 per cent of properties are affordable to struggling households.
Commenting on the research, Richard Donnell, executive director at Zoopla, said: “The gap between housing benefit levels and actual rents is widening as demand for rented homes outpaces supply. There is a greater supply squeeze in the rental market than the sales market.
“This is being compounded by a growing number of private landlords exiting the market in the face of tax changes and greater regulation, a trend that looks set to continue. The challenge for national and local government is to encourage more supply across all tenures and a policy environment that continues to attract new investment into the rented sectors.”
In May of this year, the Westminster government committed to increase other means-tested benefits in line with inflation in April 2023, but it has so far ignored housing benefit, Crisis said.
A government spokesperson told the Big Issue renters were being supported “above pre-pandemic levels” and upcoming reforms would protect renters from rent hikes.
“During the pandemic we increased Local Housing Allowance significantly and beyond inflation, benefiting over one million households by an average of over £600 over the year. We’re maintaining that boost, keeping support for private renters above pre-pandemic levels,” the government spokesperson said.
“We recognise people are facing pressures with the cost of living which is why we have taken action through our £37 billion support package to help households with rising costs, including £1,200 this year for the most vulnerable helping them to pay their bills and stay in their homes.”