London Councils has responded to new research from Shelter showing that 45% of private renters in England could not afford to pay their rent for more than a month if they lost their job.
Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said:
“This is the latest evidence of the massive pressures faced by renters in the private sector.
"We know the situation is particularly bad in London due to the capital's chronic shortage of affordable homes. That's why London boroughs are calling for more powers and resources to enable delivery of new council housing on a mass scale.
"It's also why we're calling on the government to increase the Local Housing Allowance so that private renters have more support and can afford at least 30% of local market rents.
"The government must take action on these key policy issues and work with councils in tackling homelessness and housing insecurity."
The government’s decision last year to lift the Housing Revenue Account borrowing cap and allow prudential borrowing for local authorities to invest in housebuilding has made it more financially viable for boroughs to deliver new council housing.
However, the government has maintained overbearing and unnecessary restrictions on how local authorities can use Right to Buy receipts (the money raised from council house sales). London Councils wants the government to remove these restrictions. Instead of going to the Treasury, every penny raised from council house sales should be reinvested in local council housebuilding.
People who are eligible for the Local Housing Allowance (LHA) receive it as part of their housing benefit or Universal Credit payment to cover their housing costs if they have a private landlord. Almost 200,000 London households receive LHA.
London Councils has warned that the Local Housing Allowance freeze is fuelling homelessness in the capital, after calculating that only between 0 and 15 per cent of private sector rents across the capital are covered by LHA rates. In areas such as Outer South West London, not a single property is affordable for single claimants looking for a room in a shared house.