The housing crisis is hitting middle-income earners at a shocking rate, with those relying on housing benefit to keep their home in spite of being in work rising by 350,000 since 2008 – a rate of over 58,000 a year, the National Housing Federation reveals.
The new research from the report Broken Market, Broken Dreams, shows that middle-income households earning between £20,000 - £30,000 a year accounted for two thirds of all new housing benefit claims during the last six years, as the struggle to afford a home gets tougher.
With the proportion of households having to claim housing benefit despite being in work doubling to 22 per cent (one in five) since 2008, the National Housing Federation predicts that this figure could rise to one in three in the next five years.
The Federation suggests that increasing housing costs are behind the rise in middle-income claimants. It also highlights the impact of years of only building half of the number of homes needed, stagnant wages and more people renting privately due to a critical shortage of affordable homes.
Between November 2008 and May 2014 there were 570,000 new households claiming housing benefit who were also in work – almost 300 households per day. That increase in working claimants accounted for more than three quarters (79 per cent) of new housing benefit claims made over that time.
The National Housing Federation is calling for more genuinely affordable housing to be built, so that hard working families have a decent home they can afford, without adding to the housing benefit bill. It wants all political parties to commit to end the housing crisis within a generation and set out a long-term plan that tackles its underlying causes.
David Orr, Chief Executive of the National Housing Federation, said: “Our shortage of affordable housing is now leaving families on a decent wage unable to cover the cost of their homes. This isn’t sustainable or right.
“In the 1970s around 80 per cent of government housing spend went on building homes with about 20 per cent on housing benefits, but today it’s the other way round. Billions of pounds being spent on housing benefit is just a costly sticking plaster. What we need is a long-term solution to build the affordable homes we need, so that hard working families can support themselves.
“Politicians need to address the problems of the housing market now, and commit to ending the housing crisis for a generation.”