Zoopla and charity launch campaign for higher benefits for tenants

Zoopla is warning that low-income renters across England are facing a ‘housing black hole’ due to soaring rents and the freeze on housing benefit.

In a report prepared by the portal and homelessness charity Crisis, Zoopla says that with evictions on the rise and homelessness numbers climbing in England, the cocktail of high rents and low rental supply may make the situation still worse. 

The research finds that, at the start of 2022, one in four private renters in England were reliant on housing benefit to keep a roof over their heads. 

By contrast, new analysis of Zoopla listings data finds that fewer than one in eight properties available for rent last year were affordable to those in receipt of housing benefit^. 

The research - assessing new property listings for one, two and three-bed properties across England between May 2021 and April 2022 and their affordability compared to housing benefit rate - shows average monthly rental prices are now 12 per cent higher than before the pandemic.

However housing benefit has remained frozen since March 2020 and is based on rents from 2018-19. 

Zoopla says that in May of this year, the Boris Johnson government committed to increase other means-tested benefits in line with inflation in April 2023, but has so far ignored housing benefit. 

The report also reveals that the shortfalls between housing benefit payments and rents are more than double the amount recent government figures suggest with low-income renters being forced to find, on average, an additional £648 for a one-bed, £1,052 for a two-bed and £1,655 for a three-bed per year. 

The problem is most acute for one-bed homes with the analysis showing that in almost 50 per cent of local authorities, fewer than 20 such properties listed were affordable to people receiving housing benefit in the last year. This is despite 44 per cent of private renters being singles or couples with no children and for who a one bed property would be the most suitable. 

Crisis and Zoopla are calling on the government to urgently invest in housing benefit at the autumn budget if it wants to prevent thousands from being pushed into homelessness.  

Richard Donnell, executive director at Zoopla, says: “The gap between housing benefit levels and actual rents is widening as demand for rented homes outpaces supply. There is a greater supply squeeze in the rental market than the sales market. This is being compounded by a growing number of private landlords exiting the market in the face of tax changes and greater regulation, a trend that looks set to continue. 

“The challenge for national and local government is to encourage more supply across all tenures and a policy environment that continues to attract new investment into the rented sectors.”

And Matt Downie, Crisis chief executive, adds: “We cannot sit idly by as people are left to battle against an increasingly turbulent and suffocating rental market while housing benefit - the only lifeline they have - is patently insufficient and unable to meet their needs. 

“Enough is enough. The government can no longer ignore rising rents in the cost of living crisis - it must urgently invest in housing benefit so it covers the cheapest third of rents and put in place a plan to deliver the social homes we are crying out for, if people are to have a fighting chance at finding a home they can afford.”