Today’s IFS report, The cost of housing for low-income renters, highlights how 600,000 people in the private rented sector – 500,000 of whom are living in families with children - will face shortfalls between their Housing Benefit and their rent due to changes to Housing Benefit since 2011.
The research also shows how tenants on low incomes in the bottom fifth spend on average more than a third of their remaining income to pay the rent not covered by Housing Benefit. Those in the top fifth spend an average of 19% on rent.
Many tenants on low incomes who find that their benefits do not pay market rents are unable to afford alternative homes in the private rented sector, or access social housing.
Responding to the findings, Brian Robson, acting head of policy and research at the independent Joseph Rowntree Foundation, called on the Government to uprate Housing Benefit in line with local rents at the Autumn Budget:
“These worrying figures show how families with children are being hit hard by the crippling cost of housing and cuts to Housing Benefit, leaving them struggling to make ends meet.
“Even with Housing Benefit, people on the lowest incomes are still seeing more than a third of their remaining income eaten up by their housing costs. It shows why the Government needs to lift the freeze on working-age benefits and tax credits so incomes keep up with the rising cost of essentials.
“Building more affordable homes will help fix the root cause of our broken housing market, but it’s clear families who are just about managing need help now.
“Uprating the Local Housing Allowance in line with local rents would help the 4.7million people living in the private rented sector who experience poverty after paying housing costs.”
In a briefing published this week ahead of the Autumn Budget, Incomes not keeping up with prices, JRF illustrated how half a million more people will be in poverty in 2020/21 if the Government maintains the four-year benefits freeze, announced by George Osborne in the 2015 Summer Budget.