'Living Rent' Could Wipe Billions from Benefit Bill

A new rental model based on local incomes could wipe £5.6bn off the annual housing benefit bill if it replaced the controversial ‘affordable’ rent regime. This is the finding of new research, carried out by Savills, which warns housing benefit costs could soar to £37bn by 2040 without intervention – up from £24.6bn in 2014. The report suggests the introduction of a ‘living rent’ that would link housing association rents to a proportion of local income. Rents would be reduced in many cases compared to the current system, under which they are set at 80% of the market rent. The model would require government investment of £3bn per annum, but would see housing associations invest £7bn and deliver 80,000 low-cost homes every year. Read more on Inside Housing.