There has been an 86% increase in workers claiming housing benefit in the last three years as private rents across England soar, according to a new report. 

Analysing the latest Government figures, the National Housing Federation’s (NHF) Home Truths report warns that the number of working housing benefit claimants, currently 903,440 of the 5.03 million caseload (as of May 2012), is rising by 10,000 more people every month.

It found the future of the country’s housing market is looking even bleaker forecasting a sharp rise in private rental and house prices from 2015 as a result of the failure to tackle the under-supply of housing.

Rents, it warns, have risen by 37% in the last five years and are set to soar a further 35% over the next six years, while house prices – which are predicted to fall modestly into 2013 – are forecast to grow between 5-6% from 2015 to 2017.

David Orr, chief executive of the NHF, said: “This cannot continue; we need action now to address the causes of rising housing costs, not just the symptoms. Only by addressing the chronic undersupply of new homes can we stem the financial pressure on families and Government.”

He added: “The housing market is at the point of no return; with rising house prices, rising rents and millions of families really struggling to afford their home. It’s no surprise that one in 12 families in England is on the waiting list for social housing.  Sadly the future is looking even bleaker.”

Last year 390,000 new families were formed, but only 111,250 new homes were built. The report warns that housebuilding starts will recover only gradually, from 100,000 homes this year to 140,000 in 2014, but increases will flatten out from around 2016/2017.

The Federation is calling on the Government to release publicly owned brownfield land to housing associations so they can build more houses. Using the Government’s own data, it has identified sites equivalent to twice the size of Leicester that could be built on now. It also wants more people to speak up in support of more new homes.