Yorkshire taxpayer pays price as rent rises outstrip stagnant pay

Housing benefit costs have soared
Housing benefit costs have soared
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THE skyrocketing cost to the taxpayer of helping Yorkshire families keep a roof over their heads is revealed in new figures today.

More than £1.3 billion was paid out in housing benefit by councils in the region last year, an increase of around 47 per cent in the last five years.

The amount going to private landlords alone to help pay tenants’ rents has risen by almost 85 per cent to £525 million.

Campaigners have described the figures as further evidence of a failure in the UK housing market as demand drives up rents beyond affordable levels as supply of new housing fails to keep pace.

The Government has insisted its reforms are bringing the housing benefit bill under control.

York Council leader James Alexander, who compiled the figures, said: “The vast majority of those receiving housing benefit in York are in work and are not the scroungers some would like to assume.

“Housing benefit has become a ‘landlord benefit’ and it makes no sense for privately renting tenants to pay ever increasing proportions of their wages from work on the cost of housing whilst their taxes are being used to subsidise their landlords’ mortgages.

“Many hardworking families are trapped in ‘generation rent’ and cannot get onto the property ladder.”

Coun Alexander is calling for the Government to impose a cap on rents that could be set at a regional level based on average wages and housing costs.

Such a move, he argues, could cut the Government’s housing benefit bill nationally by a fifth and release £20 billion over a Parliament to be spent on homes.

Housing benefit is administered by councils but paid for by the Government and is designed to help people out of work or on low incomes to pay their rent.

Today’s figures are the latest signs of the problems people in Yorkshire are facing when it comes to affording a place to live.

Earlier this year, research was published suggesting wages in some parts of the region the average wage would have to be £25,000 higher to have kept pace with house price rises over the last 15 years.

Average house prices in Harrogate, Hambleton and Ryedale are now more than 12 times the typical wage earned in those areas.

New data from the Office of National Statistics published yesterday showed the average house in Yorkshire has risen in value by six per cent in the last year.

The typical Yorkshire house now costs £173,000.

Campbell Robb, chief executive of the respected housing campaign group Shelter, said: “A rising benefit bill is yet another symptom of our chronic shortage of affordable homes.

“These figures are proof that as rents rise and wages stagnate, any of us could find ourselves seriously struggling to keep hold of our home – and that means that we have to protect our housing safety net to help families get back on their feet when they fall on hard times.

“But unless the government commits to building the homes we need, housing costs will soar further and the situation will only get worse.”

The Government has embarked on controversial reforms to try and bring housing benefit spending under control including introducing the so-called “bedroom tax” which reduces the amount paid to tenants judged to have more bedrooms than they need.

A limit has also been introduced on the total amount any individual can receive from the state including housing benefit.

A spokesman from the Department for Communities and Local Government said: “Rents rose by just one per cent across England the last year – a fall in real terms.

“However, welfare reforms are necessary to restore fairness to the benefits system – if not the housing benefit bill would have grown to £26 billion in 2013/14.”

Recent figures highlighted by Shadow Work and Pensions Secretary Rachel Reeves suggests the number of working people claiming housing benefit will be double what it was in 2010 by 2018 on current trends.

Labour has promised 200,000 new homes will be built for every year it is in Government if it wins the General Election.