Taxpayer cash fuels housing bubble as landlords rake in benefits

Apr 24, 2014 4:22 PM

The Department for Work and Pensions (DWP) has published figures predicting that the Housing Benefit bill for private sector tenants will rise from £9.5bn in 2013/14 to £10.0bn in 2018/19 (when you take out inflation). In the same period, the number of private tenants claiming benefit will increase by more than 10%, from 1,674,000 to 1,852,000.

In the past year, house prices have risen by 9.1% and in the same period the number of buy-to-let loans has increased by 39%, as landlords spot an investment opportunity. And it doesn’t matter if they’ve paid too much because the tenant, or their housing benefit, can pay off the mortgage.

The £9bn that taxpayers are showering on private landlords every year does nothing to make housing more affordable. Perversely, this cash actually fuels the housing bubble, which drives up rents, forcing more people to seek Housing Benefit. At the same time it pays for the worst quality housing, with no checks from the DWP on living conditions, putting vulnerable people in the hands of the most exploitative, predatory landlords.

Generation Rent is calling for a register of landlords to ensure that tenants can take action against predatory landlords, and an ambitious programme of housebuilding to bring down the cost of renting.