The housing benefit bill will reach a new high of £25bn a year by 2017, according to new government estimates.
The bill is estimated to have decreased by £425m last year, during which a number of welfare reforms affecting housing benefit took effect, but is set to increase again before reaching £25.4bn in real terms by 2019.
However, the increases are significantly less severe than those that occurred before last year's fall: the bill increased by more than £800m between 2011-12 and 2012-13, but the average annual rise for the next four years will be just £212m.
In April 2013, the coalition government introduced a number of welfare reforms to reduce the housing benefit bill. The benefit cap saw the maximum amount of benefits (including housing benefit) a claimant could receive limited to £500 for families with children and £350 for individuals, while the bedroom tax resulted in housing benefit being reduced by up to 25% for social tenants with spare bedrooms.
However, the total savings were slightly undercut by a marked increase in discretionary housing payments (DHP). The payments, from a fund set aside by government and run by councils to help those struggling with housing costs, increased from £20m in 2010-11 to £184m in 2013-14 as people sought financial help to cover shortfalls.
There are no projections for future DHP payments as they are still considered a temporary measure by the Department for Work and Pensions.
The bill's predicted increase will be driven primarily by a rising number of people claiming housing benefit. The forecast by the DWP suggests there will be a further 148,000 housing benefit claimants by 2018-19, with the increase solely attributable to people living in the private rented sector where 156,000 new claimants are expected over the next four years.
Tenants of registered social landlords, such as housing associations, will make up 13,000 new claimants while there will be 21,000 fewer claimants