Housing benefits soar for working poor

By Charles Maggs

Spending on housing benefits for people in work has risen by a staggering 86% in three years, according to a report out today by the National Housing Federation (NHF).

The group claims that there are 400,000 more working people receiving housing benefits now than in 2009.

It blames years of not building enough houses for the problem, which NHF chief executive David Orr warned looks like getting worse before it gets better.

"We now have millions of families struggling to keep on top of their rents, priced out of the housing market and nearly 10,000 more working families every month are now reliant on housing benefit to help pay their private rent," he said.

"These people are the 'strivers' the government wants to help, yet their future is looking bleak."

The report says that private rents have soared by 35% in the last five years and is set to increase by a further 29% by 2017.

Shadow housing minister Jack Dromey laid the blame squarely at the government's door and suggested more spending on house building is needed.

"The government's housing and economic policies are failing. Millions of families are struggling with housing costs as wages are squeezed and rents go through the roof," he said.

"With the biggest housing crisis in a generation and the longest double-dip recession since the War, Labour would undertake a major house building programme now to build badly needed affordable homes, create thousands of jobs and kick-start our economy."

But Orr suggested the problem is a result of a longer-term trend.

"Successive governments have failed to tackle the under-supply of housing and time is now running out," he added.

"If we don't urgently fix the housing market we will have a generation who are priced out of renting a home, let alone buying one."

A government-backed report in August suggested that reducing the quota of social housing on new build projects could reduce the problem by incentivising more developments.