Monday, 26 September 2011

Whose Housing Benefits?

Over at Mark Wadsworth a post cites an article in the The Daily Mail which reports that, for buy-to-let landlords the best returns can be gained from cheaper houses let to housing benefit claimants. It should then not be a surprise that, along with the big increase in number of bought-to-let properties, we have seen a dramatic escalation in housing benefit payments going to private landlords in the past few years.

Data from DWP/ONS
The plot also shows that rent payments to social land lords (council and housing association) has increased significantly although the growth appears linear rather than exponential. You might also like to consider this escalation in cost to the tax-payer in light of the collapse in number of new houses built in the UK in the past few years. If you were so inclined, assuming a generous house build cost of £55,000 on local authority owned land, the £7.5 Billion going to private landlords could fund around 140000 new homes per annum. However, like most others my local authority (Oxford) is currently struggling in the current economic depression to negotiate the private funding of new homes on public land for private sale.

(post edited 27/9/11)


  1. What's your source for that? Scrat around the internet as I might, I always assume about a third of HB was paid to private landlords?

    I hope that you didn't fall into the trap of treating Housing Associations as private landlords?

  2. You're right, I had used total rent payments to both social and private landlords. I have now edited the post to separate the two. The amount, and particularly the rate of increase, in rent payments going to private landlords is still very significant though. The total housing benefit budget from 2010 of £20Bn is thus made up of £7.6B to private landlords, £6.9Bn to social landlords and £4.7Bn in council tax benefit and then administration. I have the data in h_tables_budget2010.xls, I can't now recall where I downloaded it from though(!) it was either the DWP website or the ONS website