According to the National Housing Federation, private landlords in the UK received £9.3 billion from housing benefits in 2015.
The total amount of housing benefits being paid to private landlords has doubled over the past decade, with almost one third of housing benefit recipients now living in a privately rented property.
“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%),” the NHF said.
There is a severe shortage of housing in Britain which has pushed property prices up to levels which are simply unaffordable for many of Britain’s lowest earners.
The taxpayer would save over £2 billion a year if all tenants receiving housing benefits lived in social homes, the NHF said. Taxpayers pay £1,000 more per year for each family living in private properties than those in social housing.
According to the NHF, 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.
NHF chief executive David Orr said: “It is madness to spend £9bn of taxpayers’ money lining the pockets of private landlords rather than investing in affordable homes.”
“The lack of affordable housing available means that a wider group of people need housing benefit,” he added.
“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.”
NLA chief executive Richard Lambert said: “The private rented sector plays a significant role in providing much-needed homes for tenants so there seems no real benefit in the NHF taking a cheap shot at landlords.
“What we should all be talking about is the failure of successive governments to adequately allocate its housing budget and to incentivise the building of new homes. In the long term, that would be the best use of taxpayers’ money”.