10/12/2013 03:10 GMT | Updated 10/12/2013 03:46 GMT

One Person Forced Onto Housing Benefit Every Five Minutes

Oli Scarff via Getty Images
LONDON, ENGLAND - APRIL 02: Members of the public in North London walk past a poster informing of changes to the benefits and tax system that have come into force yesterday, on April 2, 2013 in London, England. The widespread changes include a cut in housing benefit payments for working-age social housing tenants whose property is deemed larger than they need and council tax support payments being administered locally. (Photo by Oli Scarff/Getty Images)

One working person is being forced to claim housing benefit every five minutes by soaring rents in London and other parts of England experiencing economic growth, according to a stark new report.

The number of employed people on housing benefit in England rose 104% since 2009, with 310 people being added every day, costing the taxpayer more than £12 billion over the period, or £1.7 million a day.

The shocking findings came from a new report by the National Housing Federation, titled Home Truths. The report warned that by 2020, house prices in London will have risen to the point that an entire generation will be locked out of home ownership and forced to rent for life.

Rented property also risks becoming unaffordable, with prices set to rise by 39% by the end of the decade, the NHF added. This would mean rents could take up to 57% of people's disposable income within the next 10 years.

The NHF called on ministers to do more to build affordable homes in the capital and other growth areas where the housing market is "overheating", warning that the failure to provide homes in sought-after areas has pushed rents beyond what ordinary working families can afford.

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The report found that England needs 240,000 homes a year just to meet demand. But it said that house-building numbers have fallen, with just 107,000 new homes built in 2012/13 - 11% fewer than in 2009.

Government spending on housing benefit has risen to £24 billion, but most of this money is going to private landlords rather than building the new homes which would stem rising housing costs, said the NHF.

David Orr, chief executive of the National Housing Federation, said: "We hear a lot about 'making work pay', but a decent job won't even cover the cost of a home in England. Billions of pounds of taxpayers' money is wasted, lining the pockets of private landlords, when it could be better spent building more homes people can afford. Relying on the private rented sector so heavily is a costly sticking plaster rather than a solution.

"In towns and cities pulling away from the recession the dysfunctional housing market is burning the fingers of many people. Hard-working families are spending more and more of their income on a home and many could be forced to move - away from jobs, schools and relatives. We need to address the problems of the housing market now, before another generation is left locked out and reliant on taxpayers to keep the roof over their head.'