Government subsidising private landlords £70bn over next five years

The government is set to subsidise private landlords by more than £70 billion through paying them housing support over the next five years, the New Economics Foundation (NEF) has found.

Analysis of the latest official statistics reveals that private landlords will receive more than six times what the government is expected to spend on affordable housing in the five-year period from 2021 and 2026 (£11.5bn).

It comes after the government announced in the October budget that the local housing allowance would be increased to ensure people in receipt of Universal Credit or Housing Benefit are better equipped to deal with recent increases in private rents, which in November had increased 6.2% year on year.

This vital relief will help struggling families with the cost of living, but these new rates of support will once again be frozen from April, meaning more pain is locked in for low-income private renters.

And the increase means that even more public funds are being used to prop up a private rented sector riddled with poor quality housing and many ineffectual landlords, instead of investing in affordable social housing.

Alex Diner, senior researcher at NEF, said:

“Everybody should have an affordable, warm and secure home to live in, yet the government is spending billions subsidising a broken system which too often fails to deliver this.

“It is extremely inefficient for the government to be paying this money to private landlords when it should be building more new genuinely affordable homes and improving the quality and security of tenure for the homes we already have.

“To overcome this mess, the government must build more social homes to meet the rising demand for affordable housing, reverse its u‑turn to loosen energy efficiency standards in the private rented sector and improve its plans to regulate private renting.”

The analysis comes as recent polling by NEF shows how many tenants in the private rental sector are forced to endure rising rents, poor conditions and unacceptable treatment by landlords.

The polling shows:

• Almost 40% of private tenants that moved within the last year are paying an average £1,200 a year above the advertised rate
• Almost 40% of private tenants who have moved in the 12 months experience damp and mould in their property
• More than 20% of these tenants have seen their landlords raise the rent mid-way through the tenancy without agreement
• Almost 20% have reported concerns about the environmental standards of the property to their local council

Notes

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

Latest figures from the Department for Work and Pensions’ benefit expenditure and caseload tables show that between 2024/​25 and 2028/​29 the government will pay £73bn in housing allowance to private landlords.

Latest data from the Office for National Statistics shows that in November 2023, rents had gone up 6.2% year on year.

Polling fieldwork was conducted by Survation between 16th October and 16th November, with a sample of 1,039 private renters in England who had moved in the past 12 months (weighted to the profile of all private renters in England by age, sex, and region). A total of 39% of this group had experienced damp and mould in their home; 21% had their landlord or letting agent increase the rent mid-way through the tenancy without their agreement; and 19% have reported concerns about the environmental standards of the property to the local authority.