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Original poster

They should get rid of the housing benefit cap!

134 replies

Diggydiggydumbdum · 03/01/2025 18:13

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?

OP posts:
Original poster
Diggydiggydumbdum · 03/01/2025 18:35

I completely agree that housing is a complex issue and that we need more homes of all types and tenures. However, a big part of the problem is how councils and developers approach housing. Many new developments are sold off at market rates or rented as luxury apartments, with only a small fraction set aside for social tenants. Councils often sell land or properties to generate short-term profit rather than using them to meet long-term housing needs.

On migration, it's worth noting that the UK birth rate has been steadily declining. In some areas, primary schools are seeing dramatically reduced attendance. For example, parts of West London are experiencing “primary school deserts,” where schools have closed or merged because there simply aren’t enough children to fill the classrooms. So while migration does add pressure, it’s not the only factor, and in some cases, local populations are actually shrinking.

It’s also important to point out that there was a cap on housing benefit before the Local Housing Allowance (LHA) cap we have now. The difference is that it was much higher and aligned more closely with market rents. Back then, homelessness levels were far lower because people could afford private rentals.

The current cap, which hasn’t been properly updated in years, has left many people unable to cover rent, forcing them into homelessness or temporary accommodation.
And this doesn’t just affect people who aren’t working. A significant number of people in temporary accommodation are working families. According to Shelter, over 55% of households in temporary accommodation in 2022 had at least one adult in work. Many of these families rely on housing benefit to top up their wages because even full-time jobs on minimum wage don’t pay enough to cover skyrocketing rents.

So while I understand the need for a cap, the current system is pushing costs elsewhere—to temporary accommodation, to struggling families, and to the taxpayer—without tackling the underlying issue. If councils built more genuinely affordable homes and adjusted housing benefit to reflect real rents, we’d see fewer families in crisis.

OP posts:
Anywherebuthere · 03/01/2025 18:33

They might as well pay my mortgage for me too while they pay out uncapped rent for others.

Seriously though, no, there has to be a cap somewhere.

unsync · 03/01/2025 18:30

More social housing needs to be built, rather than removing the cap. £1.7 billion would build a lot of social housing.

UncharteredWaters · 03/01/2025 18:30

Or what’s to stop me as a landlord going ah feck it, mortgage is up a bit, government can pay - so £750 is no longer the rent. It’s £1500. And get it.

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.

UncharteredWaters · 03/01/2025 18:28

So I could choose to live in the beautiful new riverside 2 bed swish rooftop garden apartment @ £2500 a month here and the government would pay it?

Or the older still perfectly fine 2 bed in the older block down the road at £1200 and they’d pay it nearly all currently?

No that’s not what housing benefit is for.

Ablondiebutagoody · 03/01/2025 18:26

The root of the problem is too many people and too few houses of all types and tenures. I would be happy for the government to tackle that. But they won't. Gonna get so much worse if we're trying to accommodate pretty much one million per year net migration.

ComtesseDeSpair · 03/01/2025 18:24

There has to be a cap somewhere. It can’t simply be that people on benefits are entitled to as much money as they need to pay rent for whatever they want. As previous poster says, the problem is that there’s a lot of pressure on housing driven by various factors which means higher rents and lower income people unable to afford them.

Rent control doesn’t work particularly well in NYC. People who managed to obtain rent controlled apartments decades ago and pass them down through various family members have done well out of it - much as social housing tenants who are able to obtain lifetime tenancies do well. A significant proportion of rent controlled NYC apartments are actually left vacant as it’s more cost effective for the landlord to have an empty property than a tenant paying a very low rent and the costs and responsibilities associated with having a tenanted property.

PringlePot · 03/01/2025 18:15

I think more the problem is there isn't enough homes available

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