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?

But that would mean you're only spending, at most, £300 on rent. That's really good in London compared to people who don't qualify for UC and have to pay the full rent amount.

That's actually a very sensible model.

I see where you're coming from, but I think it’s important to remember that the bedroom tax is a different issue from the benefit cap. The bedroom tax targets people in social housing who are deemed to have "too many" bedrooms for their household size, penalizing them financially if they don't move to a smaller home. While I get that we want to make better use of available social housing, it’s not as simple as just pushing people into smaller homes. For some, moving isn't an option—especially if they have disabilities, or if there just aren’t enough smaller homes available.

As for the benefit cap, that’s about limiting how much housing benefit people can claim, regardless of the size of the property. The two are related in that they both affect people's ability to stay in affordable homes, but they’re different mechanisms and require separate discussions. Both, however, highlight the lack of genuinely affordable housing and the pressure that puts on families, especially those already struggling to make ends meet.

Definitely an issue worth discussing, but we also need a broader conversation about how to meet the demand for all sizes of homes and make sure the system works for everyone.

There are plenty of undeveloped land sales where the vendor adds a clause to require the person who sells for development to share the increase in value.

@Diggydiggydumbdum

"So while migration does add pressure"? Yep. The pressure of a million extra people per year to be housed. Every year. A declining birth rate doesn't mean that the population is falling.

Ah yes the bedoom tax. People who did downsize then got moaned at for not having a spare room to self isolate in away from rest of the family during Covid
An SH tenants place is in the wrong

What I think needs to happen is the UK government needs to stop paying people housing benefit if they have a property overseas. Sure if they are in dire straits they might need help temporarily - but my old cleaner said when she was moved to Universal Credit she was told the government now allows people to claim housing benefit if the property they owned or part-owned overseas is lived in by relatives. Previously she couldn't claim housing benefit because of the housing she owns overseas. But with the change she was offered up to £1,800 a month in housing benefit on top of her benefit and her son's PIP (3 kids) and her husband has a full-time job.

If you lived where I live, that 3 bed house would be £2k a month and HB/UC would only pay £1,446.

These aren't London rents, either, it's 50-odd miles from London, so no London weighting added to your salary. (Unless you worked in London, in which case you'd be spending £500 a month on fares!)

It's probably worth mentioning that LHA doesn't apply to social housing, but he bedroom tax does.
And vice versa for private rents.

But @LakieLady that would mean your rent would be £600ish. That's more than reasonable in comparison to people who don't get any help and have to pay the full amount.

People only "don't qualify" for UC if their income is deemed sufficient for their needs, including housing costs.

If the LHA rate was comparable to actual rents, someone who doesn't currently qualify might be eligible, because the higher cap on the housing costs element raises the income threshold at which entitlement ceases.

You are not wrong.

@LakieLady that's nonsense though. When I was a single parent on UC my whole rent was paid. I was far better off than when I married and our joint income was slightly above the UC threshold and we have to pay our whole rent. The difference between having your whole rent covered and having to pay it all is not much at all.

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.

@Mydogisamassivetwat from the rest of your allowance as a single person and from the child allowance you get. I speak as someone who was on UC as a single person and had my full rent paid.

And for my wages as I also worked while getting a Uc Top up

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!

The housing benefit cap for our area is £500, I don't know anywhere you can rent for that price in our area at the moment (even in a HA house) 🤦🏻‍♀️

Getting rid of the benefit cap doesn't save money - it is a licence to charge whayever rent a landlord wants. We used to have the solution in "old days" - rent control. A system of fixing the amount a landlord can charge based on the quality and standard of the property vis-a-vis the local market factors.

In a way I agree op,I’m stuck in an awful,emotionally abusive marriage,I can’t leave because I will be intentionally making myself homeless,I can’t afford to private rent,1k a month where I live in a crappy northern town,hb entitlement would be £390 a month but there are just not enough homes to go around.

That means anyone getting HB/UC only has to pay £554 per month for a three bedroom house, whereas anyone not able to claim has to find £2,000 (from taxed salary), so the person on benefits gets it for £1,446 cheaper. Hardly an incentive to work more/earn more.

This is not realistic, the cap does not stop empty nesters - there’s a housing shortage so where would they suddenly downsize too?

The only ways I can see for everyone who can't afford current private sector rents to get a home at social housing rents is to build massive amounts of social housing or cap private rents at social housing levels.

The problem is that money doesn't come from a magic money tree, it's money raised from taxes we pay. There needs to be a limit because landlords will increase prices.

I know it's far from perfect but those of us paying for housing have a limit

It doesn't work like that, you only get 100% of the rent covered if you're on a very low income. The amount you get is tapered according to earnings and size of household.