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The number of working households having to rely on Housing Benefit has doubled

National Housing Federation website (link opens in a new window)The number of working households having to rely on Housing Benefit has doubled since the recession began in 2008. And this trend will lead to a million working people being dependent on benefits to keep a roof over their heads by the next election. This is according to Home Truths (link opens in a new window), a new report published by the National Housing Federation.

The study found that:

  • The cost of privately renting a home has risen by 37% in the past five years nd is set to soar a further 35% over the next six years. In five years that means they will be almost a third higher than they are now
  • Private rents are likely to be fairly stable through 2013 but could see steep increases from 2015 to 2018 of around 6 per cent a year, as interest rates rise and house prices increase.
  • 417,830 more working people, an 86 per cent increase since 2009, are now reliant on housing benefit to help them pay the rising rents on their home. And this is increasing as almost 10,000 more working people every month need housing benefit to help pay their rent.
  • The weakness of the economy will see modest falls in house prices into 2013, but demand conditions will support renewed house price growth of 5-6 per cent a year across England from 2015 to 2017
  • In 2011 390,000 new families were formed, but only 111,250 new homes were built. House building starts will recover only gradually, from 100,000 homes this year to 140,000 in 2014, but increases will flatten out from around 2016/2017.

National Housing Federation Chief Executive's comment

David Orr,  National Housing Federation, says: "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. These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak. This cannot continue; we need action now to address the causes of rising housing costs, not just the symptoms. Only by addressing the chronic undersupply of new homes can we stem the financial pressure on families and Government.  

"The housing market is at the point of no return; with rising house prices, rising rents and millions of families really struggling to afford their home. It’s no surprise that one in 12 families in England is on the waiting list for social housing. Sadly the future is looking even bleaker.

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

"High housing costs put financial pressure on both families and the Government. When people can’t afford the homes they need, it stops them from moving for work, it prevents young couples starting families. Aspiration is stopped in its tracks."

Sources: National Housing Federation (link opens in a new window) and Guardian (link opens in a new window)

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