Increase in working families relying on housing benefit

According to Home Truths, a study by the National Housing Federation, the North-East has seen a 108 per cent rise in employed people claiming housing benefit since 2009.

The report blames the problem on low wages coupled with rising rents and house prices.

The federation claims that the region has a chronic shortage of housing with 50,000 new houses needed by 2020 to cope with demand.

The shortage of homes means private rents are expected to rise by 25 per cent and house prices by 17 per cent by 2020, the report states, adding that the housing market is “very broken”.

Monica Burns, North-East external affairs manager for the National Housing Federation, said: “We hear a lot about 'making work pay’, but employment opportunities are scarce in parts of the North-East and wages are lower than in other parts of the country.

“This is having a knock on impact on people in work, with more and more hard-working families being forced to rely on housing benefit to help pay for the roof over their head.”

The report found that while the housing market in areas of growth was overheating, the story was different in areas like the North-East where the economy remained stagnant.

This is highlighted by figures showing the region has seen the smallest increase in the country of new businesses being created.

Ms Burns said more focus needed to be put on regenerating communities and bringing employment back.

“In areas that are stalled economically we need local enterprise partnerships (LEPs) and local councils to work with housing associations and other partners to revitalise struggling communities, create jobs and invest in social enterprise.”

In Yorkshire and the Humber, there has been a 105 per cent increase in working people claiming housing benefit since 2009.

Nationally, the report found that the country needed 240,000 homes a year just to meet demand but house building numbers are falling.