Housing benefit pushes up rents for the private tenant

A great analysis by Burning our money shows how housing benefit pushes up rents across the whole rental sector:

The Local Housing Allowance, because it is based on the median rent, is creating an ever-rising floor for rental rates that is completely disconnected from local incomes. If you’re a landlord, why would you rent for anything less than the LHA even if 50% of local workers don’t have the incomes to pay the LHA rents?

It’s free money. As landlords raise their rents to the LHA level, when the rates are recalculated each year, the lower 50% of the distribution has been truncated so the median will be progressively higher and higher following each round of recalculation. At the same time, because the government is guaranteeing landlords an above market rent, it drives up property prices and prices people who are actually working out of the housing market.”