Brits in receipt of housing benefit or Universal Credit are able to afford just one in every twenty private rental homes, new data shows. A big DWP freeze on housing benefits means that the proportion of privately rented properties available to those on low incomes has plummeted.
Local Housing Allowance (LHA) rates - which control how much rental support people can get - have remained frozen in cash terms since April 2020, however, rents for new lets have increased by over a fifth on average across the board. Research by the Institute for Fiscal Studies (IFS) shows that the proportion of new private rentals on Zoopla which would be covered by LHA have dipped from 23 per cent to just five per cent since the freeze.
The Mirror reports that this is the lowest level on record. And the quality of housing has also dropped - with those on low incomes more likely to live in homes with higher utility and energy costs.
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Low-income families in private rented properties are also far more likely than social renters or owner-occupiers to live in places which are in a state of disrepair, hazardous or completely lacking modern facilities - the IFS found. The think tank detailed a decline in accessible homes across GB, with the share of affordable properties for benefit claimants ranging from 2.5 per cent in Wales to 6.9 per cent across the North East.
Rachel Reeves yesterday criticised Chancellor Jeremy Hunt, after he failed to mention renters while laying out plans for mortgage holder support in the commons. The Shadow Chancellor slammed the voluntary measures, which Mr Hunt agreed with high street bank chiefs last Friday - after the Bank of England raised interest rates to five per cent.
She said: "While many banks and building societies are doing the right thing by their customers, a voluntary set of measures is just not good enough. The Chancellor today said that the voluntary measures would cover 85% of the mortgage market.
"But what is his answer for the more than one million families who are missing out because their lender hasn't signed up to this scheme? Tough luck. Just how bad does it have to get before the Chancellor recognises that mandatory action is needed to provide meaningful assistance?"
Ms Reeves, continued: "Where is the plan for renters who the Chancellor didn't even mention in his statement today, many of whom are paying higher rents because the mortgage costs of their landlords have gone up?"
Labour will today attempt to force a vote on the ongoing mortgage crisis, urging MPs to support their package of mandatory measures. IFS Research Economist, Tom Wernham, said: "Compared with homeowners, renters in the social and private sectors face higher rates of poverty and lower living standards.
"With housing support frozen and falling well behind rents, only 1 in 20 newly listed private rental properties could be covered by housing benefit. And the properties that are covered by benefit rates are of lower quality and more expensive to heat than the average.
"If these benefit freezes are maintained, private rents will become increasingly unaffordable for those on low incomes."
Mr Hunt told the Commons: "I know that higher inflation and interest rates cause anxiety and concern for many families, that's why the Government is already supporting families with one of the largest support packages in Europe worth £94billion, or £3,300 per household on average.
"As interest rates rise I will not take action that undermines the Bank of England's monetary objectives, but where there are non-inflationary measures we can take to relieve the anxiety faced by families, we will do so."
