Landlords in the private sector may be rubbing their hands together with glee as rents across the country continue to rise, but the government clearly isn’t — thanks to a 37% rise in three years, increasing numbers of families are struggling to pay their monthly rent bills and are being forced to claim Housing Benefit as a result.
As with most state benefits, the rules surrounding who is eligible to claim Housing Benefit are not exactly straightforward. In general, any family with an income of less than £16k per year can claim Housing Benefit, although families earning more can also claim if their rent is a large proportion of their income.
Unfortunately, claims for Housing Benefit have almost doubled in the last ten years because increasing numbers of claimants are being forced to work in part-time jobs for less money thanks to a lack of full-time positions. Sadly for the Treasury, this pattern is unlikely to change any time soon. Demand for rental accommodation shows no signs of falling and experts are warning that unless the government takes decisive action, the Housing Benefit bill will just keep on rising, to the detriment of the economy.
The National Housing Federation has predicted that rents will stabilise through next year, but are likely to rise again over the next few years as the housing market recovers and interest rates rise again. The NHF say one solution to the chronic shortage of affordable housing in the UK is for the government to allow Housing Associations to build new housing on publicly owned ‘brownfield’ land.
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