The average gap between housing benefit rates and the actual cost of rents has grown by more than 40 per cent in the last five months, it’s been claimed.
Research from the homelessness charity Crisis and the property portal Zoopla claims that just 11 per cent of one-bedroom properties in England are now affordable on Local Housing Allowance, down from 17 per cent in April.
The proportion of affordable two-bedroom properties has fallen to just seven per cent from 11 per cent and for three-beds now stands at six per cent down from 10 per cent earlier this year.
The figures, the charity says, represent an increasingly desperate situation in which people receiving housing benefit are being totally priced out of the rental market and are at real risk of homelessness. It claims that one in three private renters are reliant on housing benefit to cover the cost of their rent.
London saw the most drastic fall, with affordability almost halving in the five months to September. The proportion of properties in the capital now available under Local Housing Allowance stands at 13 per cent.
Previous Crisis and Zoopla analysis of rising rents in the year up to April showed that shortfalls were more than double what the most recent government figures, published this January, suggested. Now, this new research shows that these shortfalls are between three and four times higher.
Crisis claims that low-income renters are being forced to find on average an additional £935 a year for a one-bed, £1,477 for a two-bed and £2,285 for a three-bed a year compared to government figures of £313, £371 and £498, respectively.
Housing benefit has been frozen since early 2020 and is based on rents from 2018-19.
Matt Downie, Crisis chief executive, says: “Current housing benefit levels are woefully behind rents, leaving people on the lowest incomes with drastically fewer options of finding a home … Housing benefit isn’t included in the government’s commitment to uprate benefits – which we’re still yet to see if they will deliver on.
“Despite being most people’s biggest expense, these colossal rents are being ignored. The fact that affordability has deteriorated so drastically in just five months shows the pressing need for benefits to increase in line with real world costs – and just how punishing it is to freeze Local Housing Allowance rates for even a short period of time.
“Without urgent action we face the bleakest of winters. The new Prime Minister and the Chancellor have a choice: increase housing benefit or make thousands of people homeless. There’s only one option if we are to avoid the misery and devastation of mass-homelessness.”