They should get rid of the housing benefit cap!

[Diggydiggydumbdum]

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?

That horse has long since bolted.

Indeed. More good quality rental houses at low rents is essential to solve this problem. But we need to reduce demand too.

The housing market is already massively skewed by subsidised rents. It bears little relation to salaries because so many are getting their rents paid for them.
People have to earn a professional salary around my area just to pay the rent on a 3 bed. (£2.2k average). Local allowance is £1750. When there aren’t enough houses to go around it’s right that people who pay for themselves out of their taxed income have some sort of advantage otherwise what’s the point in working?

I get where you're coming from—nobody wants taxpayers to simply fund landlords' mortgages. But the reality is that taxpayers are already funding landlords' mortgages—and at an even higher rate—because of the way temporary accommodation works.

Here’s how it happens: landlords know councils are desperate for properties to use as temporary accommodation. Some have even evicted long-term tenants so they can re-let those same properties to the council at much higher rents. Councils often pay well above market rates for these homes because they’re scrambling to meet their legal duty to house people.

In 2023, councils spent £1.7 billion on temporary accommodation, nearly double what they spent a decade ago. Compare that to housing benefit: before the Local Housing Allowance (LHA) cap was introduced, councils spent far less on temporary accommodation because people could afford to rent privately with their housing benefit.

The current cap hasn’t stopped public money going to landlords—it’s just shifted the money into a system that’s even more expensive and inefficient.

The irony is, if housing benefit was set at realistic levels to reflect actual rents, councils wouldn’t need to pay these inflated temporary accommodation prices, and families would have more stability. As it stands, taxpayers are footing the bill for a broken system that benefits neither tenants nor the public purse—just a handful of landlords who know how to game it.

Wouldn’t it make more sense to fix this at the root, rather than continuing to throw money at the symptoms?

How do you think the business of renting a property works?

Before the cap there was no incentive for tenants on benefits to look for place with a cheaper rent.

I think there should be a cap, there has to be, but perhaps it needs revisiting more frequently so it keeps track with rising rents. I agree the answer is more and better social housing, good old fashioned council houses, but not to be sold on this time.

The Elephant and Castle neighbourhood is being physically, socially and ethnically transformed. This started with the demolition of the Heygate estate, a classic for stigmatised perceptions of council housing and the people who live in it. As the local 35% Campaign has meticulously documented, a succession of promises to Heygate residents were broken to arrive at a situation where 1,214 council homes were demolished, to be replaced with 2,704 new homes, of which only 82 (3%) are for social rent. The HA partner was London and Quadrant. To be eligible for the cheapest one-bedroom home built by them on the Heygate site, people needed a minimum household income of £57,500. The average household income in that part of Southwark is £24,324 1,214 council homes replaced with 82 social rent homes.

Absolutely agree with you—the transformation of the Elephant and Castle neighbourhood is a stark example of how regeneration projects often push out existing communities under the guise of improvement. The demolition of the Heygate Estate is a textbook case of this. Replacing 1,214 council homes with just 82 social rent homes is an outright betrayal of the promises made to the community.

It’s shocking that the cheapest one-bedroom home required a household income of £57,500, more than double the average household income in Southwark, which is £24,324. This essentially locked out the very people who lived there in the first place. It’s not regeneration; it’s social cleansing.

And it's not just about the lack of affordable homes—many of these new properties are now being sold or rented out by buy-to-let landlords, further driving up rents and making it even harder for local people to afford to live in the area. In fact, many of these new properties will never be lived in by the people who need them most. Instead, they’ll be snapped up by investors who will turn them into high-rent properties for wealthy tenants. This leaves fewer options for local people who’ve been displaced.

The impact of these projects is far-reaching. In London, between 2012 and 2022, the number of homes for social rent fell by more than 20,000, even as the population increased. Developments prioritize luxury apartments and so-called “affordable housing,” which in many cases is priced at up to 80% of market rent—completely unaffordable for most local residents.

Meanwhile, homelessness is rising, with over 100,000 households currently in temporary accommodation across the UK, and councils are struggling to meet the demand for genuinely affordable housing. Projects like Heygate exacerbate this crisis by reducing the stock of homes available for social rent and driving up prices across the board.

Regeneration should prioritize improving communities, not displacing them. The failure to deliver on promises at Heygate is a reminder of why we need stricter rules on what counts as “affordable” housing, stronger protections for social housing, and policies that ensure existing communities benefit from redevelopment instead of being priced out.

What’s happening in Elephant and Castle is being repeated all over London.

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.

If there's no cap, increased rents would swallow up and overtake that £1.7bn in no time at all.

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?

Unfortunately the ‘root’ is making sure you can house yourself before having a family ?? How do you suggest tackling that? Everything else is just a sticking plaster!
We need affordable housing which is offered for a limited period of time until you can get on your feet again. If you tie social housing into salary then the tenants will just play the system and reduce their hours or change jobs etc to make themselves remain eligible.

Social housing is the answer, especially in the south of the country where vast amounts were sold off under right to buy, and now being rented out at vastly increased rates.

Right to buy needs to be scrapped, and hundreds of thousands of social housing properties built. Especially 3 and 4 bed houses.

Also why would anyone in their right mind give a monkeys who does the loorly paid jobs in the expensive areas. Let the residents of the areas sort that out for themselves. They want a cleaner in an area with million pound house then they can pay 50 quid an hour.

The Welsh government are offering grants to people who own empty properties up to 25k. Then they want to lease them from the owners for tenants taking on any repairs and renewals.. The problem is the amount of rent that they have offered these owners which is well below market rates in our area. So the take up is poor.

Why should I be paying for you to live in a nicer home than I can afford to live in myself?

There had to be a cap, it stops empty nesters staying in 4 bed properties when they could live in a smaller property.

Why should they stay in a life time tenancy?

The other you mention 55% have one adult working - there’s the issue - low wages that won’t cover rent - minimum wage jobs were here you have 20 plus years experience in retail and still earn the same as teens starting out.

The wage cap is a more serious problem, employers leaning on the tax payer to pay minimum wages.

There are a lot of things that need to be updated to current costs. Private rent LHA cap is one, but even things like free prescriptions/eye tests etc where the income needed to be eligible hasn't moved with the min wage increases. This means that essentially your income/cost of living has stayed the same (prices rise with min wage increases) but now the income needed to be under the threshold is lower than many full time min wage workers income. Sneaky ways of stopping help to those who need it.

Eh?

You live in a society which takes a % of tax off everyone and from that pot, supports those who need additional support.

If you feel like it would be advantageous for you to become someone whose home is funded by the state then by all means get yourself fired, renege on your rent/mortgage and let the state step in.

Why should they though? If they are paying for it themselves they can buy whatever size they like they don't owe it to society to live in a smaller house than they prefer.
You are allocating blame in entirely the wrong place!

The LHA rate for a two bedroom property in our area is £425 per month. Even in the cheapest areas I haven't seen anything with two bedrooms advertised at anything near that price for a very long time.

FFS didnt you read my post upthread. Its not tenants staying in social housing thats the problem Its developers knocking down 1,214 social homes and putting 82 in their place.

Imagine the outcry if they started doing that to schools or nurseries

I get your frustration! The whole point of the cap was to reduce the amount taxpayers pay, but in reality, we're actually paying more now than we did before—just through a different channel. Councils are still paying out for temporary accommodation, but now it’s coming from other funds, not just the housing benefit budget. Just because it’s called something else doesn’t mean we’re not footing the bill—if anything, it’s making the whole thing even more expensive.

The current system just isn’t working. We’re spending huge amounts on temporary accommodation, which often costs more than housing benefit would have, all to line private landlords' pockets. It’s a vicious cycle that’s only pushing up costs, not solving the problem. And it’s frustrating because all it’s doing is shifting money around without tackling the root cause: there’s simply not enough affordable housing.

Something has to change, because this system is clearly failing both taxpayers and those in need of a stable home.

Maybe people who can afford a five bedroom can buy whatever they want! I wish I could afford a 4 bedroom because I want a spare room for craft/work.
Build more council housing and maybe increase the time you have to live there before you can buy? And have controls on if sell within say 10 years( you have to sell back to council for the price you would pay now)
Housing should be where you live not something you make lots of money on.