Housing benefit freeze is pricing families out of a home, says investigation

The Bureau of Investigative Journalism’s extensive investigation found that just one in 20 two-bed rental homes are affordable for those on benefits as charities warn of failure to meet “basic human need”

The housing benefit freeze is making people homeless and keeping them there, according to new research by The Bureau of Investigative Journalism, who found only six per cent of two-bedroom properties were affordable for families on the benefit.

Following an investigation that collected details of 62,695 two-bed dwellings available for rent in England, Scotland and Wales on the same day, The Bureau’s journalists found that only one in 20 properties were affordable to people on benefits.

They also a stark catch-22 situation that renters on local housing allowance (LHA) face every day: they are both unable to afford the property and unable to rent the ones they can afford because landlords won’t let to benefits claimants. That was the conclusion they reached after calling 180 landlords across Britain, claiming to be a single mother on LHA with an eight-year-old daughter.

LHA was frozen as part of the austerity policy brought in by the government in 2016 and was intended to cover the cheapest 20 per cent of homes on the local rental market, varying from area to area.

But while there has been no sign of the freeze ending – despite pleas from charities and campaigners, there was no mention of benefits in the latest Spending Review – rental prices have continued to rise, marginalising the impact of LHA.

As a result, the Department for Work and Pensions has been forced to fork out £153 million to top-up funds that councils can use to make up the shortfall, with plans to increase budgets going forward.

The Bureau also discovered that councils have been encouraging those facing or experiencing homelessness to rent privately or directing them to rental websites.

And campaigners have insisted that means the freeze is no longer viable.

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Jon Sparkes, Crisis chief executive, said: “This investigation paints a clear picture that for the overwhelming majority, we’re not meeting this basic human need. This is simply unacceptable – we can and must do better.

“Housing benefit is a tool to prevent people from being forced into homelessness in the first place. But rates are currently failing to cover the cost of even the cheapest private rents in the majority of areas.

“The most immediate and effective way to reduce the pressure is to restore housing benefit rate.”

Sparkes’ Shelter counterpart Polly Neate added: “If this government is serious about tackling homelessness, it is not enough to just lift the freeze, as it has said it will. It must also increase housing benefit rates to ensure they cover at least the bottom third of the rental market across the country so people can retain their homes and avoid becoming homeless.”

The impact of LHA is most keenly felt in capital cities with the Bureau finding only two out of 391 properties were affordable in Cardiff, despite 4,000 people asking the council for homeless support last year. In Edinburgh there were just 12 flats out of 662 while in London just seven of 4,400 two-bed homes were affordable in an area where LHA is at one of its highest rates at £320 a week.

The average British council would have to increase LHA by £100 each month to make the cheapest 30 per cent of rental homes affordable, according to The Bureau’s findings, but in London that jumps up to a staggering £1,422 a month.

We’re not meeting this basic human need. This is simply unacceptable – we can and must do better

“The results of this investigation are shocking, but sadly not surprising,” said Labour leader Jeremy Corbyn.

“The homelessness crisis that we see on our streets is a direct result of Tory cuts. The number of people who are living – and even dying – on our streets is truly disgraceful.

“Homelessness is not inevitable, but it becomes inevitable when a government sells off council housing, refuses to build the homes we need and encourages the development of expensive luxury flats which often stand empty and are treated as an investment opportunity.”

A government spokesperson said: “Providing quality and fair social housing is an absolute priority. The government increased more than 360 local housing allowance rates this year, by targeting extra funding at low-income households.

“We’re investing over £9 billion in affordable housing and an additional £2 billion after 2022. And we have abolished the Housing Revenue Account borrowing cap – giving councils across the country the tools they need to deliver a new generation of affordable housing.”