New housing scheme is a benefit trap, warn MPs

Properties built under the Affordable Homes Programme will cost more to rent after the Government negotiated a much lower grant with providers, the Commons Public Accounts Committee said.

The higher rents could mean some poorer people will not get new homes, and those that have their housing costs covered by benefits would find it even harder to find jobs paying enough to be worthwhile, it warned.

The PAC said it was also “not yet clear” whether the reduced grants – on average £20,000 per home, a third of those from a previous scheme – would save money in the long term as the housing benefit bill was expected to rise by £1.4bn over 30 years to cover the higher rents.

“The programme therefore shifts cost from one department to another,” the committee said.