Capped and trapped (in the UK's housing market): how the benefit cap makes it almost impossible to find affordable housing

Mark Fransham, Kate Andersen, Ruth Patrick, Aaron Reeves and Kitty Stewart

Published 31 July 2024

The benefit cap places an upper limit on the total amount a family can receive in financial support from the government in a given year. Many of those subject to the cap live in high rent properties and one stated goal for the policy was to incentivise people to move to cheaper accommodation. In this paper, we explore the potential housing options available to capped families, focusing on lone parents with three children – a very common family type among those capped. Using data from a rental listing website, Zoopla, we analyse the availability of housing that would be fully covered by the family’s housing costs entitlement within the cap. We examine rental prices, estimate the proportion of suitable properties that are affordable in a given area, and explore how the benefit cap reduces the money left for non-housing needs. Our results suggest that opportunities for capped families to move – even quite far away – are very limited. Even if families were prepared to move right across the country, away from schools and existing social networks, there were only enough suitable properties available in the country in 2022 to house one in six of our capped families. This leaves families squeezing their spending on non-housing needs to meet their housing costs. We find that even if all benefit capped families moved to the cheapest available properties within their local housing market area, 44 per cent would still be capped to the point where their living standards fall below a standard definition of destitution. We simulate the effect of possible social security reforms and find that the removal of the benefit cap is the only reform to have a significant effect on the living standards of these families.