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Housing benefit pays over a third of rents in towns with poor-quality rental stock

Housing benefit pays over a third of rents in towns with poor-quality rental stock
Anna Sagar
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Anna Sagar

Housing benefit is paying for a third or more of rents in towns that have the highest proportions of poor-quality housing, a report has found.

According to a Joseph Rowntree Foundation (JRF) report, around 70% of local authorities with below-average private rents have a bigger share of private rented homes that are non-decent than average, at 23%.

Non-decent housing means that it does not have basic legal health and safety standards, is not in a reasonable state of repair, does not have reasonably modern facilities and services and does not have insulation or heating that is effective.

The JRF said that more than £1 in every £3 of private rent in Blackpool and Hartlepool is paid for with housing benefit.

It added that around £1 in every £4 of private rent is paid for with housing benefit in Hull, Great Yarmouth, Hastings, Oldham, Wolverhampton, Bradford and Sunderland.

The report explained that there had been a “rapid expansion” of the private rented sector (PRS) in coastal and ex-industrial towns in England, and with lower house prices and higher rental yields, private landlords had purchased homes, some of which are being let out to tenants in poor condition.

The JRF said that housing benefit, which is paid to low-income tenants to assist with housing costs, is being used to subsidise poor-quality housing, noting that this was “poor value for money for taxpayers”.

The report said that a shortage of social housing left low-income households little choice but to live in non-decent rental properties.

The JRF said that in more than one in 10 local authorities, over £1 in every £20 spent in total was spent on temporary accommodation.

The growing demand for temporary accommodation means there is a rise in private companies renting poor-quality homes to local authorities with a “significant premium”.

The JRF said that this can cost up to five times more than similar homes that are owned by local authorities and puts increased financial pressure on councils.

Last year, a report from Resolution Foundation found that roughly 10% of people surveyed lived in poor-quality housing.

‘We need to get this dysfunctional system working again’

The JRF said that moving private homes into social ownership could make expensive temporary accommodation cheaper, improve housing standards and make local housing markets more equal overall.

It is calling for local councils to be supported to buy existing homes to let, as they are better quality and less expensive than temporary accommodation. This could be done by extending the Local Authority Housing Fund.

The community rented sector should be grown in lower-cost housing markets where homes are in poor condition, and Right to Buy should be reformed to stop social housing being sold off and to keep subsidies in the system.

Darren Baxter, principal policy adviser at JRF, said: “Taxpayers and local councils shouldn’t be footing the bill for poor-quality properties owned by private landlords. Tenants on low incomes and homeless people living in temporary accommodation are also paying the price by being forced to live in poor-quality and even downright dangerous homes.

“We need to get this dysfunctional system working again. Strategically bringing private homes back into social ownership is a rapid way to fix this crisis. Doing so would stop vast sums of public money paying for poor-quality homes and rebalance local housing markets towards more affordable homes.”