Nearly £11bn a year in housing benefit will be paid to private landlords in five years’ time.
New figures from the Department for Work and Pensions show £9.5bn will be spent on housing benefit this financial year.
DWP predicts that this annual bill will grow to £10.8bn by the financial year 2018/19.
DWP says that 40% of all housing benefit goes into the private sector, and does not expect this proportion to change.
Campaigning group Generation Rent hit out at the system, saying it is a ‘subsidy’ that is encouraging buy-to-let investment at the expense of tenants who would like to become first-time buyers.
Alex Hilton, Generation Rent’s director, said: “The £9bn that taxpayers shower on private landlords every year looks set to balloon.
“Because landlords know the taxpayer can pay off their mortgage, this cash perversely fuels the housing bubble, which drives up rents, forcing more people to seek housing benefit.”
https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2014
Comments (2)
I have still to meet a potential landlord who thought I must get into BTL because the taxpayer can pay off my mortgage. It's just agenda driven tosh. When the government decided to make payment direct to the benefits claimant and not the landlord in the naïve belief they would pay it over as rent, they shot themselves in the foot. BTL landlords would sooner rent to private tenants than benefit claimants. These claims are just plain wrong on so many levels.
Local authorities now depend on the PRS provision for the homeless and it is the only market for those tenants evicted from public housing – without it, public debt would be higher.
The housing benefit market has always been a specialist market – management is complex and returns generally lower through higher costs. It is generally not the market for B2L landlords unless covering a short period of tenant's unemployment or partial benefit payment for low-earnings, in which case the landlord may not even be aware of the funding.
The PRS plays a vital part of housing's social and economic mix. If you want to look at "subsidies" – examine the £40bn in decent homes improvements to social housing since 2000, which the public accounts committee has described as poor value.
Alan Ward- chairman RLA