Generation Rent, a housing campaign group, has accused private landlords of exploiting the current system and benefitting financially from council funds. The organisation argues that landlords are receiving millions in incentive payments that were originally intended to support households facing homelessness.
According to the group, councils across the country are allocating large sums of money each year to encourage private landlords to make their properties available. These payments are meant to help local authorities secure housing for people who approach them after becoming homeless, or those at risk of losing their homes.
Generation Rent has highlighted that the scale of this spending is significant, often involving tens of millions of pounds annually. Rather than ensuring affordable housing, campaigners suggest the money is effectively boosting landlord profits while failing to solve the wider issues within the housing market.
Examples of these payments show the amounts involved are far from small. Manchester City Council reportedly spent over £3.3 million, while Enfield Council allocated more than £2.7 million. Ealing Council followed closely with £2.25 million, Birmingham with £1.65 million, and Nottingham with £1.59 million. These figures underline the scale of financial support being directed towards landlords.
On top of these council-wide totals, there are also eye-catching examples of single incentive payments. Southwark Council paid £15,385.44 for one arrangement, Camden offered £13,500, and Hammersmith and Fulham allocated £13,000. Ealing’s highest single payment reached £11,367.42, while Brent paid £10,700 in one case.
In London alone, the situation appears even more striking. Of the 27 councils that responded to Generation Rent’s enquiries, more than £24 million was spent on incentives in the financial year 2024/25. This equates to an average of more than £900,000 per council. Campaigners argue this reveals just how widespread the practice has become.
Ben Twomey, chief executive of Generation Rent, described the current rental landscape as resembling the “wild west.” He claims landlords are able to act as they please, setting their own rules, while councils are left with little choice but to pay. In his view, landlords are taking advantage of the system to increase their income, at the expense of taxpayers and vulnerable households.
Twomey also pointed to the growing difficulties facing local authorities. With rents continuing to rise sharply and the government maintaining a freeze on the Local Housing Allowance, councils are struggling to find affordable options for residents in need. The combination of high rents and limited financial support has left them in what he describes as a “near impossible position.”
Faced with these pressures, councils have resorted to offering large one-off payments to landlords. In some cases, these sums stretch into tens of thousands of pounds. The aim is simply to persuade landlords to rent their properties to those in need of housing. Critics argue this approach is unsustainable and an inefficient use of public funds.
Twomey has called the practice a “senseless waste” of money that could otherwise be directed towards long-term solutions. Rather than subsidising landlords, he believes investment should be focused on increasing the supply of genuinely affordable homes, which would reduce reliance on costly incentives.
While the government has set out targets for housebuilding, Generation Rent argues this is not enough. The group insists that immediate measures are required to address the severe shortage of affordable rental properties across the country. Without urgent changes, they warn, councils will remain trapped in a cycle of paying landlords just to secure housing.
One of their key demands is for the Chancellor to lift the freeze on the Local Housing Allowance in the upcoming Autumn Budget. By raising this support, Generation Rent believes benefit claimants would be better able to meet their housing costs, easing the pressure on councils.
In addition, campaigners want to see stronger powers handed to Metro Mayors. They argue that the forthcoming Devolution Bill should give these leaders the authority to place limits on rent increases in their regions. This, they say, would help curb spiralling rental costs in cities where tenants are under the most strain.
For now, however, the burden continues to fall on local councils. They are left balancing the immediate need to house vulnerable families against the longer-term challenge of finding sustainable housing solutions. Generation Rent believes the current approach is unfair to both taxpayers and renters, and risks entrenching a system that primarily benefits landlords.
The group’s findings have sparked fresh debate about housing policy and the role of the private rental sector in tackling homelessness. With millions being spent every year on landlord incentives, campaigners argue that reform is urgently needed to protect public money and deliver more secure housing options for those most in need.