A lack of affordable private rental properties in Britain is putting tens of thousands of families at risk of destitution due to a cap on the total amount of benefits some claimants can receive, according to new research
George Osborne, the former Conservative Chancellor, introduced the benefit cap – a separate policy to the two-child limit – in 2013 to incentivise households claiming benefits to find cheaper accommodation or move into paid work.
The benefit cap is currently £22,020 for families outside the capital. This is the maximum amount that a working-age family can receive in state support, including housing benefit, if no-one in the household is working, or if total earnings are low (less than the equivalent of 16 hours per week at minimum wage).
There are exemptions for households where an adult or child is in receipt of disability benefits. The benefit cap is a sister policy to the two-child limit, with both policies severing the link between a family’s need and their entitlement to support. More than 70% of those affected by the cap are single parent families, and more than one-third are single parents with a child under five.
Researchers explored whether a typical family affected by the benefit cap, which is a single parent with three children, could find somewhere cheaper to rent in their area by analysing the 1.6 million rentals advertised on Zoopla in 2022, the property listings website.
Outside London, families would need to find a property rented for less than £577 per month to be unaffected by the cap. The research team found that the vast majority of these families could not escape the cap by moving because there were too few affordable alternatives. In June 2022 there were 28,400 single parent three child families affected by the benefit cap – but only 4,368 affordable three-bedroom properties advertised on Zoopla in the whole of Britain in that same year.
Many areas saw no affordable, three-bedroom properties advertised on Zoopla during the whole of 2022. Researchers found that 42 of 192 Broad Rental Market Areas (BRMAs) – local housing market areas defined by government property experts – had zero properties that this family could move into to escape the cap. Moreover, 72 per cent of capped families lived in BRMAs with fewer than one affordable property per ten capped families.
Even if all benefit capped families moved to the cheapest available properties within their BRMA, 44 per cent would still be capped to the point where their living standards fall below destitution level. Families in much of London and parts of the South East of England would find themselves living on less than £4 per person per day, and in some parts of London less than £3 per person per day. This money would need to cover food, clothing, heating, and other bills. For many households, escaping the cap would require moving to a completely different part of the country, away from children’s schools and their family and friends, and for those working, from current employment.
Researchers also interviewed 45 families over four years, 25 of whom were affected by the benefit cap. They found that high rents were already pushing these families into overcrowded properties that was poor quality – damp and mould were frequently mentioned, and some had problems with rats and mice:
It has the damp…the kitchen is broken… So again we have mouse…and the house doors even, we don’t have doors in our room. (Bushra)
Families were falling behind on utility bills, borrowing from family, going into debt and relying on food banks:
It’s left me in a debt of £1,200-and-something…I’m struggling just with buying shopping and everyday things right now. That’s without paying for gas and electric. (Kalima)
Most did not see moving to a cheaper property as an option because they were already living in the cheapest property and there were long waiting lists for social housing:
I’ve been bidding for over a year now, I would say, yeah, over a year I’ve been bidding now… I’m eight hundred and twenty now on the bidding so I could get a place, I could not get a place, so I’ve still got like a three year wait. (Lucy)
The paper calls for the removal of the benefit cap to “restore the link between need and entitlement.” It concludes by highlighting the dangers of basing policy on false assumptions about people’s everyday realities and motivations: “Bad assumptions run the risk of just making people poorer.”
Dr Mark Fransham, one of the authors of the study, said: “The entitlements towards housing costs that vulnerable families can claim are so far removed from the actual cost of housing that many families are finding themselves unable to heat, clothe and feed themselves. We were shocked to discover just how little affordable private rental accommodation there is. There has been lots of discussion about removing the two-child limit in recent weeks and while that is important it would not help these families – the benefit cap policy needs addressing if we are to deal with the spectre of destitution in the UK.”
Alex Beer, Head of Portfolio Development at the Nuffield Foundation said:
“This important research should be high on the reading list for the government’s new taskforce on child poverty. It highlights the disconnect between one of the policy expectations of the benefit cap – in which families move to cheaper properties to improve their financial position – and the harsh reality of an acute shortage of affordable homes for rent. Many families with their benefits capped already live in poor quality housing, and opportunities to move somewhere cheaper are almost impossible.”
