Private tenancies are “unaffordable” for the majority of low income families because housing benefit is “so seriously out of line” with renting costs, new research has found.
The report stated, “LHA rates are now so seriously out of line with local rents that private renting has become unaffordable for most low income tenants and this substantially increases their risk of homelessness.
“The longer the freeze continues, the wider the gap becomes and the more costly it becomes to restore LHA rates to their full value.”
The report found that outside of London two thirds of LHA rates for shared accommodation had a weekly shortfall of £4 or more, while more than half of LHA rates for bigger properties had gaps of £10 or more.
Within the capital, where the housing crisis is particularly stark, LHA gaps for shared accommodation were more than £10 a week, with every other property size seeing a weekly LHA shortfall of a least £30.
LHA claimants in rented properties are facing shortfalls ranging from £25 a month for those in shared accommodation outside of London to more than £260 a month for a house in the capital, CIH said.
CIH chief executive Terrie Alafat said, “Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents.
“We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.
“We are calling on the Government to conduct an immediate review and to look at ending the freeze on local housing allowance.”
Head of Unite Community Liane Groves said “at the very least” the freeze on housing benefit needs to be ended immediately.
She added, “But to tackle the root cause of the housing crisis, the government needs to replenish the country’s social housing stock.
“Without a massive council house building programme, which will also benefit the economy and bring jobs and extra revenue for the treasury, families will continue to be exploited by landlords charging extortionate rents due to demand outstripping supply.”
Meanwhile an undercover investigation by housing charity Shelter found a shocking 1 in 10 letting agent offices had a branch policy of refusing prospective tenants who were on housing benefit, regardless of whether or not they could afford the rent.