THE BLOG
10/12/2013 07:38 GMT | Updated 08/02/2014 05:59 GMT

Housing Crisis Tips Thousands More Workers Onto Housing Benefit

How on earth did it come to this? We already knew that we are not building nearly enough new homes to keep pace with population growth and changing demography. In 2012/13 we managed around 107,000 new homes despite common acceptance that our minimum requirement is 240,000. But what is more worrying is that this is fewer even than in 2009, the year after the financial crash, when pretty much everything ground to a halt. This ought to be the time that these numbers are really taking off. They're not.

Our Home Truths report into the housing market today shows with disturbing clarity just how tough things are.

We already knew that an entire generation of hard working people on average, and usually even above average income, is unlikely to be able to buy a home, especially in some areas like London and the South East. The news that house prices look set to climb by a further 35% by 2020 is profoundly bad news for those who still aspire to buy their own home. And we also knew already that this means that more and more people are turning to the private rented sector to rent their home, even though rents are rising there even more quickly, by an increase of 39% in rent by 2020.

What we perhaps did not know, or not fully realise, is what this means in practice for the millions of people directly affected. It means that people privately renting are now typically paying 50% of their disposable income in rent. In 10 years that will have risen to 57%. It also means that more and more people are relying on the state to support their rent as costs rise and wages fail to keep pace.

Shockingly over the past fours years an extra 310 working people have been making a claim for housing benefit every single day. That's one more person every five minutes. Ministers are right when they say spending on housing benefit is out of control. This is why. The housing market is a mess. Imagine if we were spending £24bn a year building new homes that people could afford rather than spending it bailing people out on rapidly rising rents.

It is all incredibly frustrating. We know that building a new home creates 2.3 new jobs. Build 1000 and you put 2,300 people into productive work, paying tax and spending money in the local economy. You create new homes which support the growth of our best businesses and industries. Each £1 generates £2.41 in the wider economy, thereby stimulating further growth and economic activity.

Yet despite the obvious need, the clear demand and the huge economic benefits we still fail to invest in housing. We still have the hysterical reaction of the well-heeled and well housed to the idea of new homes being built. We limit our own economic recovery and social well-being. We appear content to leave hundreds of thousands of young people with no realistic prospect of finding work. This makes no sense.

With the right support in a nation that really wants to say Yes to Homes, housing associations could do a huge amount more. For all our sakes it is critical that they can.