0:03 AM, 29th June 2023, About 8 months ago 4
People receiving housing benefits or Universal Credit can afford just one in 20 private rental homes, according to new figures.
Research by the Institute of Fiscal Studies (IFS) reveals since the Local Housing Allowance (LHA) freeze, the proportion of new private rental properties on Zoopla that would be covered by LHA has plummeted from 23% to 5%.
The government has frozen LHA rates since April 2020.
The Joseph Rowntree Foundation which co-authored the report reveals the quality of affordable properties has dropped and those on low incomes are more likely to end up in homes with higher heating costs.
Darren Baxter, principal policy adviser at the Joseph Rowntree Foundation (JRF), says: “Private renters on low incomes are seeing the number of properties they can afford shrink dramatically as housing benefit fails to keep pace with soaring rents.
“Clearly, the government’s freeze on local housing allowance (LHA) is unsustainable.
“Even if renters can find somewhere affordable to live, it’s likely to be a home that’s unsafe or in disrepair. These homes are also harder to heat, leaving renters facing energy bills they just can’t afford.
He added: “As more people on low incomes rent privately, it’s crucial that the government unfreezes LHA and ensures it reflects market rents so that families aren’t forced to choose between homes that are unsafe or homes they can afford.”
The IFS says the decline in accessible homes had been felt across Britain, with the share of affordable properties for benefit claimants ranging from 2.5% in Wales to 6.9% in the North East.
The report also finds that rents have raced ahead of housing benefit entitlements as rents for new lets have risen by over a fifth on average.
Tom Wernham, a research economist at IFS, warns that rising rents will hit people on low incomes the hardest.
He said: “Compared with homeowners, renters in the social and private sectors face higher rates of poverty and lower living standards.
“If these benefit freezes are maintained, private rents will become increasingly unaffordable for those on low incomes.”