A think tank claims that the government will pay landlords in the private sector six times the expected spend on new affordable homes in the five-year period between 2021 and 2026.

The New Economics Foundation – which describes itself as politically independent – says this is because over £70 billion will be paid to private landlords over this period through housing support.

Its analysis of official statistics claims to show 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.

It comes after the government announced in the October Autumn Statement 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 per cent year on year. 

The NEF says: “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, says: “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 NEF also claims its polling shows that almost 40 per cent of private tenants that moved within the last year are paying an average £1,200 a year above the advertised rate, and that almost 40 per cent of private tenants who have moved in the 12 months have experienced damp and mould in their property.

The foundation also alleges that over 20 per cent of these tenants have seen their landlords raise the rent mid-way through the tenancy without agreement, and almost a similar proportion have reported concerns about the environmental standards of the property to their local council.

The think tank’s new chief executive, Danny Sriskandarajah, took office last month after being CEO of Oxfam UK; at the think tank he replaced former chief executive Miatta Fahnbulleh after she was selected as the Labour candidate for a parliamentary seat in London.