PRS landlords to get £70bn in government housing support, NEF says

Private rented sector landlords are set to receive more than £70 billion in housing support from the government over the next five years, according to an analysis by the New Economics Foundation (NEF).

The think tank found that private landlords will benefit from six times more public money than the government’s planned spending on affordable housing in the same period (£11.5 billion).

The NEF based its analysis on the latest official statistics and the government’s announcement in the October budget that the local housing allowance (LHA) would be increased to help people on Universal Credit or Housing Benefit cope with rising private rents, which grew by 6.2% year on year in November.

The organisation also surveyed tenants and found that 40% are living in homes with mould and damp, and 40% are paying more rent than was advertised,

‘Government is spending billions subsidising a broken system’

Alex Diner, a senior researcher at NEF, said: “Everybody should have an affordable, warm and secure home to live in, yet the government is spending billions subsidising a broken system which too often fails to deliver this.

“It is extremely inefficient for the government to be paying this money to private landlords when it should be building genuinely affordable homes and improving the quality and security of tenure for the homes we already have.”

He added: “To overcome this mess, the government must build more social homes to meet the rising demand for affordable housing, reverse its U-turn to loosen energy efficiency standards in the private rented sector and improve its plans to regulate private renting.”

NEF welcomed the increase in LHA

The NEF welcomed the increase in LHA as a ‘vital relief’ for struggling families but warned that the new rates of support would be frozen from April, leaving low-income private renters worse off in the long run.

The think tank also criticised the government for using public funds to ‘prop up’ a private rented sector that is ‘riddled with poor quality housing and many ineffectual landlords’, instead of investing in affordable social housing.

Private tenants suffer from high rents

The NEF’s analysis coincides with recent polling by the think tank that shows how many private tenants suffer from high rents, bad conditions and unfair treatment by landlords. The polling reveals that:

• Nearly 40% of private tenants who moved in the last year pay an average of £1,200 a year more than the advertised rate
• Nearly 40% of private tenants who moved in the last 12 months have damp and mould in their property
• Over 20% of these tenants have had their landlords increase the rent mid-way through the tenancy without agreement
• Nearly 20% have complained to their local council about the environmental standards of the property.