Research Project

Build to Let: Rethinking the use of housing benefit to help families out of temporary accommodation
16 December, 2011

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NLGN have published a report that revealed London’s boroughs could build a new generation of council houses, avoid disrupting the lives of poorer citizens and save money for the Exchequer in the process. This could allow them to build 9500 new homes for London and save £56m in the process.

The costs of housing benefit for families in B&Bs and other temporary accommodation is so high that it in some parts of the capital it would be cheaper to build new social housing for them. As councils pay for private rents at market level, the rent for each household in social housing would be much cheaper.

As ministers prepare to cap the amount of housing benefit families can receive – potentially leaving 64,000 people who currently reside in London unable to afford to continue living there – NLGN calls for the government to examine new house building as a partial alternative.

The report argues that this will be less disruptive to peoples’ lives while also meeting the government’s aim of building more properties and providing a short term fillip for the capital’s economy. This new housing could be built using a combination of housing benefit set at social rent and block grant from the Department for Work and Pensions to repay the development costs. Alongside the cashable long term savings, the capital’s housing supply would be increased by 9500 units.

Simon Parker, Director of the New Local Government Network, stated:

“We recognise the need to contain housing benefit costs, but the idea of building new homes represents a win-win solution for the government, councils and families. Our analysis suggests that 10 boroughs might be able to save money while providing more properties.

Our figures provide a robust overview of the opportunity available. It is now for central government to work with the boroughs to understand how this proposal will pan out on the ground and to help access the support councils need to make it happen.

With a predicted shortfall of 750,000 homes in London by 2025, there has never been a more vital time to pursue this approach.”

Publication Date: 16 December 2011
Authored by: Tom Symons and Laura Rodriguez