Local authorities are spending tens of millions of pounds a year in one-off ‘incentive’ payments to private landlords to encourage them to take homeless families, new research has found.

The campaign group Generation Rent sent Freedom of Information (FOI) requests to all 32 London councils who provide statutory homelessness services and the ten councils outside of London with the biggest statutory homelessness issues.

The requests related to the practice of local authorities paying private landlords cash payments to incentivise them to house households who have approached the local authority as homeless or threatened with homelessness. These are one off payments, separate to housing benefit.

A total of 37 councils responded to the FOIs, with the research finding these councils collectively paid private landlords incentives on 10,792 occasions during 2024/25, spending over £31 million in the process. This an average of 292 incentive payments per year and an average yearly spend of nearly £850,000.

The top five councils with the highest annual spends were:

• Manchester City Council – £3,345,411.95
• Enfield Council – £2,730,337.42
• Ealing Council – £2,259,913.77
• Birmingham Council – £1,657,605
• Nottingham Council – £1,595,276.

The top five highest single incentives paid to private landlords were:

• Southwark Council – £15,385.44
• Camden Council – £13,500
• Hammersmith and Fulham Council – £13,000
• Ealing Council – £11,367.42
• Brent Council – £10,700.

In London, the 27 councils that responded spent over £24 million on landlord incentives in 24/25. This is an average spend of over £900k per council.

The last time data on landlord incentives was collected in the capital was 2018. Compared to 2018, the overall money spent by councils in London has increased by over £8.5million (54%).

Meanwhile, in 2018, only one council in London reported paying an incentive of £10,000 or higher, whereas, in 2024/25, six London councils reported paying £10,000 or more for a single incentive payment.

Responding to the findings, Ben Twomey, Chief Executive at Generation Rent, said: “Everyone needs a home, it’s the foundation of our lives. But the rental market is like the wild west.

“Landlords are often a law unto themselves, rigging the system to line their own pockets at the expense of people experiencing homelessness and the local councils that are trying to house them.

“The soaring cost of renting and the government’s decision to freeze the Local Housing Allowance has put councils across the country in a near impossible position. In a desperate bid to avoid placing people in temporary accommodation, they’re forced to pay individual landlords sometimes tens of thousands of pounds just for them to agree to rent out their home. It’s a senseless waste of our public money.

“The government’s housebuilding targets are welcome, but these findings show urgent action is needed to address the widening lack of affordable homes. The chancellor must unfreeze Local Housing Allowance in the upcoming Autumn Budget to give renters claiming benefits relief from towering household costs.

“Meanwhile, the government also must give Metro Mayors the power to limit rent increases through the upcoming Devolution Bill, allowing them to slam the brakes on sky-high rents in cities across England.”