The government spends four times as much on housing benefits as it does on building houses – and Britain’s most innovative property boss has a simple idea for how we can get the UK’s £20bn housing benefit bill down.

Rent reform campaigner Ajay Jagota believes the UK’s £3.5bn tenancy deposits could be transformed into Help to Buy ISAs, lowering Britain’s Benefits Bill while helping millions take a first step on the property ladder.

Figures from the Office National Statistics show that out of the £28bn the British government spends on housing each year £21bn is spent on housing benefit – an eye-watering 75% of the overall total.

Of the remaining £7bn, £4.5bn is spent on subsidies to house-builders such as the Help to Buy scheme and only £2.5bn on direct investment.

Campaign group the Renters Alliance estimate that £2.5bn of Housing Benefit a year ends up in the pockets of landlords who rent out properties which do not meet decent homes standards – homes which could be in poor repair or even unsafe.

The total of housing benefit being paid to private renters has more than doubled over the last decade, despite the government making 13 cuts to housing benefit since 2010. Treasury forecasts also suggest private sector housing benefit spending will rise to almost £10bn a year by 2022.

Deposit reform campaigner Ajay Jagota is founder and managing director of deposit replacement insurance solution Dlighted and South Shields-based sales and lettings firm KIS.

Dlighted is a proptech company delivering a deposit replacement insurance solution as an alternative to the cash Tenancy Deposit schemes TDS, DPS and Mydeposits.

It offers a rent guarantee for landlords, alongside free legal support and £500,000 of asset protection.

Ajay said:

“The most obvious solution to cutting Britain’s housing benefit bill is to get people into properties of their own – and a simple way to do that would be to help them put money aside for a deposit on their own home instead of taking it off them in as a deposit on a rented one.

“Right now £3.5bn of renter’s money is sitting in deposit accounts at an average of almost £1000 a tenant. 97% of that money will be handed back to them at the end of the tenancy and even the 3% that is necessary barely protects their landlord from rent arrears or damage.

“When insurance policies offer landlord far superior protection it makes little sense to me to not give tenants a greater chance of buying their own home by putting that money into a similar scheme to Help to Buy.

“Not only would this have the additional benefit of lowering Britain’s benefit bill and, if the Renter’s Alliance figures are accurate, it would also abolish a £2.5bn subsidy currently being paid to slum landlords – surely a much more sensible way of spending £6bn”