Private landlords “are lining their pockets” with housing benefit, the National Housing Federation has claimed.
But the jibe has been denounced by a private landlord body, which said that the money was not a hand-out to private landlords but a support for tenants to pay their rent.
According to the National Housing Federation, private landlords received £9.3m in housing benefit last year – double the amount of ten years ago.
A lack of affordable housing has meant a 42% rise in the number of private renters receiving housing benefit since 2008, says the umbrella body for housing associations. Private landlords received £4.6bn housing benefit in 2006.
If all those in the private rented sector had lived in affordable housing in the last seven years the public purse could have saved £15.6bn, claims the briefing paper.
More than £1,000 a year extra is spent on housing benefit for a family in the private rented sector (£5,705 compared to £4,638 in the social rented sector), the report calculates. That figure goes up to £3,300 more a year in London.
David Orr, chief executive at the National Housing Federation, said: “It is madness to spend £9bn of taxpayers’ money lining the pockets of private landlords rather than investing in affordable homes.
“Housing associations want to build the homes the 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.”
Nearly double the proportion of families claiming housing benefit are in work (47% compared to 26%) than six years ago, according to the report. Housing benefit recipients renting privately also now earn an average of £4,000 more than six years ago.
The Federation also said homes in the private rented sector “are of lower quality with 1 in 3 failing to meet the English Housing Survey’s Decent Homes Standard”.
But Richard Lambert, chief executive officer at the National Landlords Association, said: “Housing benefit is not a subsidy to landlords, it’s a support for tenants to ensure they can pay for their housing.”
He added that the proportion of landlords letting to tenants in receipt of housing benefit had halved over the last five years because “benefit levels have not kept up with rents”.
“The NHF is clearly still reeling from the news that its members have been ordered by government to reduce spending over the next four years, so it comes as no surprise that they are looking to shift the emphasis and point the finger elsewhere,” Lambert said.
“The private rented sector has grown as the market responds to the increasing demand for homes, particularly from a growing proportion of tenants whom the social sector and housing associations simply are not able to support in the current circumstances.”
Comments (8)
Lining their pockets is a very unfair comment.
I have 22% of my estate with Local Housing Allowance tenants.
If the NHF want me to stop housing these individuals, I will receive at least 26% more in rent than I do at present.
Where are we going to put all these people whilst the NHF gets around to building the new homes?
This statement has not moved anything forward, just annoyed those of us who are helping.
With all the anti landlord rhetoric that is out there I would not blame you one bit if you did stop letting to LHA tenants. I stopped when one of my clients had to face the anti landlord approach used by one London Borough in SE London.
The government sell off our assets at a knockdown price ( Margaret Thatcher’s right to buy council houses). Get a one hit wonder to the treasury. Create a shortage of council housing (do we call it social now? ). Population allowed to increase (mainly because we need more working people in the UK to pay for our increasing pension bill). Housing Association new build can’t keep pace, mortgage rules are tightened so people find it harder to borrow to buy (despite the lowest interest rates in history), so we look to the private landlord to help alleviate the government created problem. And the National Housing Federation blame those fat cat private landlords !
Nice and correct summary, Alan.
RTB didn’t create a shortage of housing. The population has grown, it is the lack of building to match population growth that is the problem. Now what was the council supposed to do with the revenue it received … build new houses! Did they?
I don’t think they were allowed to re-invest in new housing with the sale proceeds which is partially why there was a problem (but I might be wrong?)
More emotive clap trap. If the National Housing Federation with their no doubt highly paid chief executive provided all the social housing necessary it would not be necessary to the private rented sector to rescue the social sector.
Perhaps what is really meant is the that National Housing Federation is not getting the £9.3 to line its own pockets with this money. Not surprising double of 10 years ago as the housing crisis has more than doubled in the last ten years, one of the reasons no doubt that contributed to the Brexit vote.
Shame they can’t make positive steps to resolving the problems rather than slag off others who are providing the essential accommodation they have failed to provide.
The saving is coming directly by taking 3 months to process a claim and back paying only 1 month so tenant is 2 months in arrears.
Housing associations receives money from Government for repairs, upgrades etc, landlords have to earn this.
The challenge here is that people in position of decision making do not understand profit and loss but just spend as they receive it from the government eg tax payer. There is really no difference.