Page 2 | They should get rid of the housing benefit cap!

Diggydiggydumbdum · 2025-01-03T18:13:48+00:00

I’ve been thinking a lot about the housing benefit cap (Local Housing Allowance cap), and the more I read, the more it feels like a scam. It was meant to save money by capping how much rent housing benefit would cover, but instead, councils are spending eye-watering amounts on temporary accommodation, and families are left stuck in the middle. Before the cap, housing benefit covered private rents—even the inflated ones landlords charged. It wasn’t perfect, but at least people had more options: rent privately or wait for council housing. Now, with the cap, so many families can’t afford private rents and are being evicted, which means councils have to step in with temporary accommodation. And here’s the kicker: councils spent **£1.7 billion** on temporary accommodation in 2023, almost double what they spent a decade ago. Individual households in temporary accommodation can cost councils **£10,000–£20,000 a year**, if not more. The money they’re “saving” on housing benefit? It’s being swallowed up by this anyway. Plus, the conditions in temporary accommodation are often terrible—unsafe, overcrowded, and miles from people’s support networks. Kids are growing up in limbo, and families have no choice over where they live. Meanwhile, private agencies and middlemen are making a fortune out of the system. Wouldn’t it make more sense to tackle the root of the problem? One option could be adjusting housing benefit to reflect real rents, so more people could afford private housing again. Another idea is rent caps, like they have in places like New York. If rent control works in one of the most expensive cities in the world, why can’t we try it here? People always say, “Just move to a cheaper area,” but that ignores the fact that more expensive areas still need workers. Who’s going to do the jobs that keep those places running—childminders, cleaners, hairdressers, carers—if everyone has to move out? It just feels like the current system isn’t working for anyone (except maybe the landlords and agencies profiting from temporary housing). Why aren’t we talking about this more?

SevenMoon · 04/01/2025 05:46

The problem is that when lha was introduced it was capped at the lowest 50% of rents. It was reassessed regularly and worked fine. The coalition government then lowered it to 20% but then the Tory government stopped reassessing it and capped increases while rents were shooting up so it doesn't even cover the lowest 20% anymore.

Itiswhatitis80 · 04/01/2025 05:11

bestcatlife · 03/01/2025 22:00

@Itiswhatitis80 I hear you.

Another awful aspect of this is it costs around £300 per week to rent a room at a refuge (if you are in work or have savings). So working people are essentially blocked from accessing a refuge

Exactly,I do work but what are women supposed to do after that?..that’s why when most leave they end up going back,something seriously needs to change in this country.

Poppyseeds79 · 04/01/2025 02:02

caringcarer · 04/01/2025 00:08

I think it was a big mistake selling off the council houses. I also think they should be utilised by families not single people living on their own in a 3 bedroom house. The cap for housing is actually very generous. I think people need to work to pay their own rents unless disabled. There never used to be all these government top ups and such generous benefits. The tax payer can't afford them and it means less money for education and health.

I have rented a 3 bedroom home (ex council - since sold to HA) for 23yrs. I've always worked full time, paid full rent, maintained the property. I originally moved in with Dd (now moved out).

We were originally offered a 3 vs 2bed as it in was in such a crap state no one wanted it. I've paid nigh on the current asking prices of houses around in rent over the years I've lived here. I had applied to downsize twice, and was refused as they have plenty of 3 beds but no 2 beds. I can't move into a flat as they don't have any, and I'm way too young to move into a bungalow (age restrictions)... Where exactly would you suggest I move? 🤔

mumda · 04/01/2025 00:28

There is huge money available for companies running private children's homes, HMO and a huge demand for housing.

The people buying are not owner occupiers
.

caringcarer · 04/01/2025 00:24

Also I think.if people can't afford to rent in London they should move out of London. My DS moved up North and bought a house for less than he could rent for in the Midlands.

caringcarer · 04/01/2025 00:22

PokerFriedDips · 03/01/2025 21:17

There should be rent caps not housing benefit caps - and the rent caps should apply to all, not just hb claimants. A standard rental rate per square metre that is the expected rental cost in an area, and there could be licences for say 25% of properties to charge a higher rent than this if they can show that the property is of significantly nicer quality than the average rental property in the area. If a property can't be economically rented out at the rent cap rate and still meet the landlord's costs then they will just have to sell up - beneficial to first time buyers too!

LL are selling up in numbers. In the next couple of years a lot more will sell as they can't get a Victorian terrace house up to an EPC C because they are mostly single skinned. The more LL's selling up, the fewer rental houses, the higher the price they will rent for. Demand far outstrips supply. The last 3 bedroom terraced house with a back yard I put up for rent I got 15 viewings booked the first day it was advertised and 12 the second day. The EA stopped advertising after that. Of the 27 viewings over 20 wanted to rent it. It's hard picking the one family to rent to when honestly most of them sounded suitable. Rent caps will simply mean even fewer rental properties for families to rent.

caringcarer · 04/01/2025 00:08

I think it was a big mistake selling off the council houses. I also think they should be utilised by families not single people living on their own in a 3 bedroom house. The cap for housing is actually very generous. I think people need to work to pay their own rents unless disabled. There never used to be all these government top ups and such generous benefits. The tax payer can't afford them and it means less money for education and health.

Copperoliverbear · 04/01/2025 00:04

I think they should keep the cap but up the limit, the cost of living is so high and paying services charges ect for some people really impacts on their lives.

AndThereSheGoes · 04/01/2025 00:03

Purpleturtle46 · 03/01/2025 18:29

Landlords have really been shafted by the government in recent years, especially in Scotland where I am although England following suit. It's resulted in them selling up in droves and an ever further shortage of housing.

So if they are selling up then those homes become available to buy. And if it's " in droves" then the price goes down and they become affordable to those cypurrently forking out on massive rents.
Everyone can have one property they can rent out at any price. More than one and it's capped HA rent prices, more than five properties and you need to take people off the housing register.

CranfordScones · 03/01/2025 23:54

Everything has unintended consequences. Your 'solution' would lead to private tenants not on housing benefit being crowded out by state subsidised tenants who are able to pay higher rents - and who would have no incentive to negotiate lower rents when the taxpayer is handing them a blank cheque.

Too many people - not enough houses.

StormingNorman · 03/01/2025 23:54

WalkingThroughTreacle · 03/01/2025 22:25

The houses don't somehow disappear because private landlords sell up.

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No, but most people renting (and definitely those on housing benefit) can’t afford to buy them.

Halfemptyhalfling · 03/01/2025 23:36

The housing allowance cap was originally set at the median local rent so households on benefits could rent from cheapest 50% of rented housing available. I don't understand why the conservatives didn't update the allowance as rents increased.

I think private landlords should either sell with tenants in situ so don't have to be evicted or have to find them an equivalent property in the same school catchment.

Nospringchix · 03/01/2025 22:54

Mydogisamassivetwat · 03/01/2025 21:09

But if you were on full HB, where would you get the £300 from? That’s the problem.

And that was 6 years ago. The house I rented for 1,500 now goes for 2,100 pm. I bet the LHA hasn’t raised by the same amount.

Edited

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Exactly what I was thinking. £ 300 might not sound like much but if you only get about £400 in esa/ jsa/ UC it certainly is.

StormingNorman · 03/01/2025 22:50

JimHalpertsWife · 03/01/2025 20:10

The Housing Benefit cap should fully cover the rental cost of a social home / Council home that is the right size for your family.

Why should the cap inflate, at a cost to all taxpayers (including those who live in the social housing), to further line private landlords pockets?

Because private landlords are providing social housing in lieu of the government having enough housing stock. And if the cap doesn’t cover the landlord’s costs, then they will stop providing housing too. This would leave more people in temporary and insecure accommodation, or even homeless.

The costs and risks to landlords have gone up significantly over the past few years and these all need to be factored into how a landlord prices their property:

the high inflation rate has doubled or even tripled mortgages.
mortgages are no longer tax deductible so there needs to be more “profit” in the rent to allow the landlord to meet their income tax bill.
service charges on flats are unregulated and skyrocketing. Again, a cost to the landlord that has been doubling, tripling or more over the past couple of years.
there is a shortage of tradesmen available for maintenance and repairs and their prices have shot up.
the cost of materials for maintenance and repairs has shot up with the high rate of inflation over the past couple of years.
Trouble tenants are now more difficult and more expensive to remove.

Most landlords are not “lining their pockets”. It’s a much less profitable business to be in now so guess what - landlords will exit the market. If caps and rents generally don’t start to reflect the true cost of the properties being rented, their housing shortage will be exacerbated.

Nsky62 · 03/01/2025 22:45

StMarie4me · 03/01/2025 20:07

It needs to be feasible for local market rent though. Where I live a 3 bed terrace is £900pcm and the HB would be £625. How would that work?! There's nothing cheaper. Nothing.

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Cheap, here 1 bed more than £900

Nowdontmakeamess · 03/01/2025 22:37

WorriedRelative · 03/01/2025 22:06

Tackling the root of the problem would be building a shit load more council houses

And stop selling off the ones we already have

Itsallgonesideways · 03/01/2025 22:35

What's being done about the houses that are lying empty and falling into disrepair because of absent owners? There are ten 3 bed houses near me which are empty & could house families who need them. Yet, there's also a massive waiting list for social housing in my area.

Original poster

Diggydiggydumbdum · 03/01/2025 22:30

It’s also worth mentioning that the real scandal here is that taxpayers are actually paying more for private rents due to the shift towards temporary accommodation. Councils are now paying above-market rents for properties used as temporary housing—often far higher than they would have spent on housing benefit in the past. Before the housing benefit cap, councils were paying about £1.1 billion a year on temporary accommodation. Now, that figure has risen to £1.7 billion in 2023. Despite the benefit cap, taxpayers are still spending more, but we’re led to believe it’s working when in fact, it isn’t.

In some areas, temporary accommodation costs can reach £100-£200 per week more than the housing benefit that would have been paid for the same property, depending on the local market. What’s worse is that the money is going straight into private landlords’ pockets, while the rest of us continue to foot the bill, thinking the cap is saving us money. But it’s not saving anything—it’s simply funneling more money to landlords and leaving tenants suffering in precarious and overcrowded conditions.

On top of this, tenants in temporary accommodation have little security. Unlike those in social housing, they don’t have secure tenancy agreements. These temporary contracts often include clauses that prevent them from having people stay over and can allow landlords or councils to ask them to move at very short notice. These families don’t have the stability they need to rebuild their lives, and the rest of us are paying the price for it, without seeing any real improvement.

The cap was supposed to save taxpayers money, but in reality, it’s just costing more while leaving both tenants and taxpayers worse off. The only people truly benefiting from this system are the private landlords who are getting paid higher rents for temporary accommodation, all while the housing crisis worsens.

OP posts:

HaddyAbrams · 03/01/2025 22:27

Diggydiggydumbdum · 03/01/2025 22:22

I think there’s some confusion here between the benefit cap and the housing benefit cap—they’re two different things.

The benefit cap is a limit on the total amount of benefits a household can receive. You’re right that many people, such as those who are working or disabled, are exempt from it.

But what we’re talking about here is the housing benefit cap, also known as the Local Housing Allowance (LHA). This cap applies to anyone claiming housing benefit or the housing element of Universal Credit, regardless of whether they’re working or not. It’s based on the number of bedrooms your household needs and the area you live in. The problem is that these LHA rates have been frozen or poorly updated for years, and they often don’t reflect the actual cost of renting.

For example, in many areas, the LHA cap for a three-bedroom home is around £1,000 a month, but the actual market rent for that same property could easily be £2,000 or more. The shortfall has to be covered by the tenant, whether they’re working or not, and if they can’t manage it, they risk eviction and homelessness.

This gap is a major contributor to the housing crisis because it’s pricing people out of the private rental market, pushing them into temporary accommodation or overcrowded homes. So while the benefit cap doesn’t apply to everyone, the housing benefit cap affects a much larger group of people, including working families.

The housing crisis is absolutely linked to the housing benefit cap—and it’s part of why councils are spending billions on temporary accommodation while families are left struggling.

To be fair, referring to it as the "housing benefit cap" when it's actually called the LHA rate isn't going to help with distinguising between the two.

And to be clear. I know the difference, but they are linked in a way. If my landlord puts my rent up, but still in line with LHA rates I wouldn't actually get any of that extra money because of the benefit cap.

WalkingThroughTreacle · 03/01/2025 22:25

Purpleturtle46 · 03/01/2025 18:29

Landlords have really been shafted by the government in recent years, especially in Scotland where I am although England following suit. It's resulted in them selling up in droves and an ever further shortage of housing.

The houses don't somehow disappear because private landlords sell up.

WeylandYutani · 03/01/2025 22:24

iwasntexpectingthatoops · 03/01/2025 22:21

They need to get rid of the bedroom tax too.
I'll never understand why they haven't got in place for pensioners but everyone else has to pay it.

My neighbour is an elderly woman living in a 3 bed on her own, unfortunately in our village we have no social flats or bungalows. Only houses so she has nowhere to move to. She is exempt from the tax. If she was under pension age she would be forced to pay it, makes no sense

You only pay the bedroom tax if you claim HB.... and it is not really paying extra. It is just you don't get the LHA for more rooms than you need.
Some people are in social/council housing, and do not receive HB.

bestcatlife · 03/01/2025 22:24

The bedroom tax absolutely needs scrapping. A few years ago Labour promised they would do just that, however they are proving themselves to be liars.

HellofromJohnCraven · 03/01/2025 22:23

I think it's ridiculous.
My dd went through a period of unemployment through no fault of her own. She was renting the cheapest 1 bedroom flat in town. She was 26 and only entitled to the shared accommodation rate.
So, her total UC was something like £25 a month more than her rent.
How are you supposed to magically give notice on a 1 bed flat and find a flat share immediately?
Luckily she had parents that could help her but the state is in no way a safety net.

Original poster

Diggydiggydumbdum · 03/01/2025 22:22

I think there’s some confusion here between the benefit cap and the housing benefit cap—they’re two different things.

The benefit cap is a limit on the total amount of benefits a household can receive. You’re right that many people, such as those who are working or disabled, are exempt from it.

But what we’re talking about here is the housing benefit cap, also known as the Local Housing Allowance (LHA). This cap applies to anyone claiming housing benefit or the housing element of Universal Credit, regardless of whether they’re working or not. It’s based on the number of bedrooms your household needs and the area you live in. The problem is that these LHA rates have been frozen or poorly updated for years, and they often don’t reflect the actual cost of renting.

For example, in many areas, the LHA cap for a three-bedroom home is around £1,000 a month, but the actual market rent for that same property could easily be £2,000 or more. The shortfall has to be covered by the tenant, whether they’re working or not, and if they can’t manage it, they risk eviction and homelessness.

This gap is a major contributor to the housing crisis because it’s pricing people out of the private rental market, pushing them into temporary accommodation or overcrowded homes. So while the benefit cap doesn’t apply to everyone, the housing benefit cap affects a much larger group of people, including working families.

The housing crisis is absolutely linked to the housing benefit cap—and it’s part of why councils are spending billions on temporary accommodation while families are left struggling.

OP posts:

iwasntexpectingthatoops · 03/01/2025 22:21

They need to get rid of the bedroom tax too.
I'll never understand why they haven't got in place for pensioners but everyone else has to pay it.

My neighbour is an elderly woman living in a 3 bed on her own, unfortunately in our village we have no social flats or bungalows. Only houses so she has nowhere to move to. She is exempt from the tax. If she was under pension age she would be forced to pay it, makes no sense