More working people in England claiming housing benefit as rents soar

To let

The increasing cost of private rent is forcing a growing number of people in England to rely on housing benefit, the National Housing Federation claimed today.

In a new report titled ‘Home Truths 2012: England’ the organisation said that millions of families are struggling to pay for their home because rental and house prices are continuing to rise, after years of not enough homes being built.

The Home Truths report found that the cost of privately renting a home in England has risen by 37% in the past five years and is set to go up by a further 35% over the next six years. In five years’ time rental costs are predicted to be almost a third higher than they are now.

Both private rental and house prices are forecast to rise sharply from 2015 as interest rates rise and house prices increase.

Looking specifically at the rental market, the National Housing Federation pointed out that private rents are currently increasing at a faster rate than house prices because of strong demand. There is a growing cost to the taxpayer as a result of this, as more employed people need government help to meet the cost of their rent.

Figures cited by the National Housing Federation show that the number of working people claiming housing benefit has risen by 417,830 over the past three years, an 86% increase since 2009. Every month almost 10,000 more working people need housing benefit to help pay their rent, the report claimed.

David Orr, chief executive of the National Housing Federation, called on the government to address the situation by focusing on what he called “the chronic undersupply of new homes”.

Housing Minister Mark Prisk, quoted by the BBC, said that the government is determined to attract new players to the private rented sector and to “pull out all the stops to get Britain building”.

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