A call has gone out to shift tens of thousands of the poorest tenants in the private rental sector into social housing in a bid to save money.
The Chartered institute of Housing and the Centre for Homelessness Impact, in a joint study, say the government could save £1.9 billion a year by moving recipients of Housing Benefit or Universal Credit from private rented accommodation to social rented housing.
However, it recognises that there’s a dire shortage of social housing; but it adds that if the government built 10,000 homes a year in the social rented sector it would cost the taxpayer some £40m a year, and could save £44m a year in housing subsidies if used to house tenants currently in private rented housing or temporary accommodation.
The savings in benefit and temporary accommodation costs could offset the cost of building more social rented homes, insists the study.
James Prestwich, director of policy and external affairs at the CIH says: “This joint report reveals the full benefit to the exchequer of building social rented homes.
“Councils currently house almost 75,000 households, at risk of homelessness, in private rented accommodation. If these households could be rehoused in social rented homes councils would save £572m a year.”
And Dr Lígia Teixeira, chief executive officer, Centre for Homelessness Impact, adds: “We should ask hard questions about whether the very large sums paid in benefits to subsidise the housing costs of people on low incomes are being used in the most effective way.
“While evidence suggests this financial assistance constitutes an important part of the UK’s homelessness ‘safety net’, our report shows that it is possible to make limited resources go further: for instance, by redirecting some of this money into social housing which can be better value and more secure for tenants.”
Before the pandemic temporary accommodation for families experiencing homelessness was costing local authorities £1.2 billion a year; almost four fifths of such accommodation is met using private rented housing.
The Department of Work and Pensions currently spends £30.6 billion a year on Housing Benefit and the housing element of Universal Credit, which is around 15 per cent of the benefits budget. This is forecast to increase to £31.3 billion by 2025-26 as more people switch to Universal Credit.
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