More than half a million landlords face rent arrears as government housing support collapses, new research has shown.

A combination of soaring rents since the pandemic and the Government’s housing benefits freeze means that many tenants are increasingly unable to pay their landlords. 

There are just 576,000 homes available that are affordable for the 1.2 million families in receipt of housing benefit, according to a report by the charity Crisis and property website Zoopla.

Tenants on housing benefits account for one in four of all private renters in England. However, the payments that these families receive mean that 12pc of rental properties listed in the last year are affordable to them. 

Overall, there is a shortfall of 624,000 genuinely affordable rental homes, making these households at risk of homelessness.

In almost half of all local authority areas in England, there were fewer than 20 affordable one-bedroom rental properties listed in the last year.

Monthly rental prices have climbed by 12pc since the pandemic began, yet there has been no increase in housing benefits payments.

Back in March 2020, the Government raised the Local Housing Allowance (the basis on which housing benefits are calculated) beyond the rate of inflation at the time as part of its pandemic response. However, the rate has been frozen ever since.

England’s low-income renters face a housing “black hole” and will be driven out of their homes, forcing thousands to sleep in cars, on friends’ sofas, or to rely on hostels and B&Bs, the report warned.

It also found that the shortfall between housing benefit payments and local rents for family homes is more than triple what the most recent official figures suggest.

According to Government estimates, a low-income family renting a three-bedroom property must find £498 to cover the shortfall between their housing benefit payments and their rent each year. In reality, the Crisis and Zoopla report found, this shortfall is more than three times that, at £1,655.

For low-income tenants in one and two-bedroom properties, the Government estimated that the annual benefits shortfall is £313 and £371 respectively. The report found that in each case the gap was more than double this at £648 and £1,052.

Tenants must scramble to cover the widening shortfalls just as soaring inflation and rocketing energy bills are destroying their savings – meaning that many will be unable to cover their bills and will fall into arrears.

In May this year, the Government committed to increasing other means-tested benefits in line with inflation in April 2023, but it has ignored housing benefits.

The shortage of affordable properties is spread across the country. In eight local authorities – from Lewes in the South East to Halton in the North West – there are no one-bedroom properties at all that can be covered in full by housing benefits payments.

Crisis and Zoopla urged the Government to invest in housing benefit in the autumn Budget to prevent thousands of families being pushed into homelessness.

Matt Downie, of Crisis, said: “Housing benefit – the only lifeline they have – is patently insufficient and unable to meet their needs.”

Richard Donnell, of Zoopla, said that the rental supply crunch was compounded because the Government’s buy-to-let crackdown is pushing landlords to sell up.

“The challenge for national and local governments is to encourage more supply across all tenures and a policy environment that continues to attract new investment into the rented sectors,” Mr Donnell said.

A Government spokesman said: “We recognise people are facing pressures with the cost of living which is why we have taken action through our £37bn support package to help households with rising costs, including £1,200 this year for the most vulnerable, helping them to pay their bills and stay in their homes.

“Our Renters’ Reform Bill will deliver a fairer deal for renters, bringing into law new measures to protect tenants by abolishing Section 21 ‘no fault’ evictions and empowering them to challenge poor practice, poor housing standards and unjustified rent increases.”

The Zoopla and Crisis research analysed property listings of one, two and three-bedroom properties across England between May 2021 and April 2022, and how prices compared to local housing benefit rates.

London property: Bidding wars for bedrooms, £54k up front and £700 rent hikes - inside city's insane rental market

Renting in London has hit new lows as tenants fight bidding wars for bedrooms, pay as much as £54,000 up front to secure homes and face evictions from landlords hiking rent. Tenants say they're dealing with "outrageous" price hikes as they battle to find homes in the capital.

The Local Democracy Reporting Service spoke to tenants who fear soaring rent, bills and food costs could price them out of London for good. Campaigners also say there aren't enough homes being built in the capital to meet demand.

Graduate Alice Preece, 22, said she's been struggling to find somewhere to live with four friends in north and property as agents are asking for "outrageous amounts". She told the Local Democracy Reporting Service: "The few properties we have been able to see have all gone for outrageous amounts over the asking price.

"We’re all stretching as much as possible to bid above asking price, but the people who win these bidding wars are those willing to pay an extra £600 per month.

"We’re including paying rent upfront as part of offers but so is everybody else. There doesn’t seem to be a way to win for most graduates on starter salaries. There’s no way to compete. There aren’t any properties left with low asking prices for your standard graduate’s budget."

Alice, who works in PR, said she had been calling up to 20 estate agents a day to try and find somewhere to live, but that she was close to giving up. She said it's also an uphill fight even trying to secure a viewing when a decent property crops up.

She said: "It’s a minefield. Getting a foot in the door is virtually impossible when a place that goes up on Rightmove an hour ago already has 30 people on a waitlist for viewings. It’s massively impacting my mental health. It’s putting strains on my friendships and I’m starting to accept that living in London just isn’t something me and my friends can afford to do. Coupled with bills rising in October and January I don’t see how any of us would be able to afford rent, bills and food."

Despite spiralling cost of living pressures, wages are not increasing at the same rate. Pay excluding bonuses was down 2.8 per cent between March and May when compared to a year earlier and adjusted for inflation, according to figures from the Office for National Statistics. This is the fastest drop since records began while inflation is at a 40-year high.

Many other renters say they are struggling to find homes in London as landlords and agents ask for huge sums of money upfront. Emily Atherton said she missed out on a property in Highbury after someone offered £54,000 to snap it up.

She tweeted: "It had 25 people coming in one day and was on for £3k a month. The person who got it paid 18 months rent upfront and I was asked if we could counter offer. That’s £54k upfront."

Kilburn resident Charlie Hullah worries that he could be priced out of London after his rent was jacked up by "hundreds of pounds". The 29-year-old creative said: "I've been really lucky to have been a guardian in a flat for a number of years but the guardian industry has changed a lot and feels almost at private rent levels."

He added: "Our rents were increased by hundreds of pounds recently and we're all scrambling to find alternative ways of living which don't appear to be possible now. I have had to accept this week that I cannot afford to rent privately in London - even as a guardian - unless I am a property guardian and move outside of the capital. So many of my neighbours have left London and I think I'll have to do the same. Guardianship used to be affordable due to the risks and highly insecure license agreements but they are up there with market rates now."

Charley also said the demand for properties seems to have soared. He said: "I went to a virtual viewing on Zoom last week with a property guardian company that was mostly made up of people who've not done it before - 35 people in total. It's always been crazy but this feels like a tipping point for sure."

Max Willson, 27, said the rent market in London is currently "dire" as hundreds of bidders compete with each other for rooms. The market research manager said he's moving to Oval after living with persistent issues with mice and bugs at his previous home in Finsbury Park.

He said: "The situation has been dire and incredibly stressful over the last few weeks. I started out on SpareRoom but it became an audition of personality and there were hundreds of people going to rooms that were a reasonable price.

"I then buddied up with two chaps and we started looking for three-bed places. It became obvious quite quickly that people put bids on places they didn't view and did bids that were £200-300 over asking price.

"Sometimes we were rejected for ridiculous reasons like not living together or not writing a cover letter for our application. Because everyone seems to be panicking... it's like all sense has left us and we are bidding on tiny rooms and grotty flats that are not worth four-figure rents. It's enhanced and capitalised on for sure by landlords and letting agents."

Max said he finally managed to find a flat but feels he's paying too much for the quality of the property. He added: "I am less than happy paying the amount of money I do to someone who owns dozens of properties across the capital and who is presumably helping to perpetuate this whole problem."

Jess Espin, 29, also said she struggled to book viewings and compete with bidders offering huge fees upfront. She said: "Estate agents weren’t even bothering to call us back or email us when we enquired about properties because they were going so quickly. We were turning up for viewings and there were eight people viewing places at the same time.

"We had to put offers in on the day of viewing to even stand a chance but everywhere people were offering way above asking price and then some offering six months upfront."

Jessica, who works as a campaign executive, said she had to move after being priced out from her current home in West London. She added: "Our landlord has increased the rent by £700... I think increasing it that much is criminal.

"We finally managed to find somewhere but it took us about 3 months in the end. One property we looked around was so bad [there was] no double glazing... the stairs were broken and had holes in... it had electric heaters not gas radiators, and it was damp. They were charging £1,200 a month for that."

Mayor of London Sadiq Khan is calling for the government to freeze rent prices in a bid to save Londoners nearly £3,000 over two years. He said in a previous statement: “Private renters make up nearly a third of everyone living in the capital and they are set to be hit by a devastating combination of price and bill rises. Too often the needs of private renters are ignored by both landlords and the government."

Freddie Poser, director of PricedOut, a campaign for affordable housing in England, said more homes need to be built in England for all budgets. He told the Local Democracy Reporting Service: "We absolutely are hearing anecdotes of massive rent increases, with one couple being told, 'I don't know how much I'm putting the rent up by, I just know you can't afford it'.

"The key to making housing more accessible, in the medium and long term, is an increase in supply. This means more social, affordable and market rate homes. The key barrier to the provision of this is the planning system - this needs to be loosened to allow for more homes."

Housing charity Shelter has also warned evictions are back at pre-pandemic levels with private renters struggling to make ends meet. Research by the charity found 64 per cent of private renters said they'd struggle with the cost of moving if they were evicted.

Shelter's chief executive Polly Neate said in a statement: “Today’s figures paint a grim picture of households across England unable to keep their heads above water as the cost-of-living crisis bites. People who don’t leave their home before the bailiff comes are the ones who have run out of options and have nowhere else to go.

“Every day our emergency helpline supports people having to make impossible choices between putting food on the table or paying their rent. Housing costs are people’s biggest outgoing and those who have nothing left to cut back will soon be left with nowhere to call home.

“The government must urgently unfreeze housing benefit so it covers the true cost of renting before more families are evicted and pushed into homelessness. Whoever becomes the next Prime Minister needs to get a grip and put ending the housing emergency at the top of their to-do list.”